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Soaring home prices have been a pressing issue in America — and elevated mortgage rates only add to the strain. With the Federal Reserve’s recent rate cut, many homebuyers might expect borrowing costs to ease.
Not so fast, says “Shark Tank” investor Kevin O’Leary.
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“Even though the Fed dropped 25 basis points, which is a quarter of one percent, people are anticipating a big drop in mortgage rates — nothing happened, because the 10-year didn’t budge,” O’Leary said in a recent appearance on “Good Morning America [1].”
He explained that Fed policy has limited sway over long-term borrowing costs.
“Think about fixed income and mortgages — they’re kind of priced off five- to 10-year Treasury bills, which didn’t move because there’s a lot of concern about inflation, about debt, other things which have nothing to do with housing,” he said.
In other words, if bond investors are worried about inflation or federal deficits, they may demand higher yields to compensate — pushing rates up — regardless of what’s happening in the housing market.
Then came O’Leary’s blunt reality check:
“We’re never going to see 3.5% mortgage rates again, ever, in our lifetimes. But by the way, for 50 years, our parents and generations before us lived with 7% or 8% mortgages, so get over it everybody.”
Mortgage rates have indeed surged. The average rate on a 30-year fixed mortgage has climbed from below 3% just a few years ago to well over 6% today. And historically, as O’Leary points, there were decades when rates were far higher.
Given today’s elevated home prices and high borrowing costs that aren’t likely to change, O’Leary offers simple advice: “You just buy a smaller house and get on with life. Chop, chop.”
Buying smaller might become a necessity for many households. Realtor.com estimates that a typical U.S. household would need to earn about $118,530 annually to afford a median-priced home of $402,500 — more than 50% above today’s median household income of roughly $77,700 [2].
Getting on the housing ladder
Despite today’s headwinds, real estate remains one of the most enduring paths to building wealth.
For starters, it’s a time-tested hedge against inflation. As inflation rises, home prices tend to increase as well, reflecting higher costs for materials, labor and land. Rental income often follows suit, providing landlords with a stream of income that adjusts with inflation.
Real estate also doesn’t need a roaring market to generate returns. Even during slowdowns, high-quality, essential properties can continue to generate passive income through rent. In other words, the asset can work for you — regardless of broader market conditions.
The best part? While buying a house can be challenging, you no longer need to purchase a property outright to invest in real estate.
Read more: How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement
Become a real estate mogul — starting with $100
Crowdfunding platforms like Arrived have made it easier than ever for everyday investors to gain exposure to America’s real estate market.
Backed by world class investors like Jeff Bezos, Arrived allows you to invest in shares of rental homes with as little as $100, all without the hassle of mowing lawns, fixing leaky faucets or handling difficult tenants.
The process is simple: browse a curated selection of homes that have been vetted for their appreciation and income potential. Once you find a property you like, select the number of shares you’d like to purchase and then sit back as you start receiving any positive rental income distributions from your investment.
Tap into the multi-trillion-dollar home equity market
As home prices have risen over the years, Americans have built substantial wealth through homeownership, but the $35 trillion U.S. home equity market has historically been dominated by large institutions.
Homeshares is changing the game by allowing accredited investors to gain direct exposure to hundreds of owner-occupied homes in top U.S. cities through their U.S. Home Equity Fund — without the headaches of buying, owning, or managing property.
With risk-adjusted target returns ranging from 14% to 17%, this approach provides an effective, hands-off way to invest in owner-occupied residential properties across regional markets.
Be the landlord of Walmart
If you’ve ever been a landlord, you know how important it is to have reliable tenants.
How do grocery stores sound?
That’s where First National Realty Partners (FNRP) comes in. The platform allows accredited investors to diversify their portfolio through grocery-anchored commercial properties without taking on the responsibilities of being a landlord.
With a minimum investment of $50,000, investors can own a share of properties leased by national brands like Whole Foods, Kroger and Walmart, which provide essential goods to their communities. Thanks to Triple Net (NNN) leases, accredited investors are able to invest in these properties without worrying about tenant costs cutting into their potential returns.
Simply answer a few questions — including how much you would like to invest — to start browsing their full list of available properties.
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[1]. @kevinoleary . YouTube post on Sept. 24, 2025
[2]. Realtor.com. “How much you need to earn in every state to buy a home”
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.