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Kevin O’Leary has a message for anyone waiting for cheap mortgages to come back: forget it. “We’re never going to see 3.5% mortgage rates again, ever, in our lifetimes,” the Shark Tank star says — but “our parents and generations before us lived with 7% or 8% mortgages, so get over it.” His fix? “You just buy a smaller house and get on with life. Chop, chop.” (1)
The line keeps going viral, and I get why. It’s blunt. But it’s only half right.
I know a little about this. I was a landlord for years, I’ve bought and sold plenty of property, and as a CPA I’ve run the rent-versus-buy math more times than I can count.
Here’s what Kevin glosses over. Buying today is brutal. The typical home now takes around $110,000 in income to afford — near a record high (2) — and affordability has slid for five straight months. (3) Thirty-year rates are still stuck around 6.8% as of this week. (4)
So is he right, or is he a rich guy who hasn’t shopped for a starter home in decades? Honestly, both. Here are five things he gets right and wrong about buying a home now.
1. He’s right: the 3.5% mortgage is gone, and waiting is a losing bet
Rates in the 3s were a once-in-a-generation fluke. Betting your life plan on their return is a mistake, and Kevin’s right that “wait and see” often just means “rent forever while prices climb.”
But there’s one cost of owning you can cut today, no matter where rates go — what you pay to insure the place.
Home insurance rates have exploded — and if you haven’t shopped around lately, you’re almost certainly paying too much. Fight back with shopping and comparison sites like Insurify Home Insurance.
Insurify is a free marketplace that pulls real quotes from dozens of top insurers side by side — see your rates in minutes. No endless forms, no spam calls, no obligation — just your best rate. Compare quotes right now
2. He’s right that a smaller house beats no house
This is the part people hate, and it’s true. A modest home you can actually afford builds equity; a dream home you stretch for builds stress. I’ve watched buyers torch their budgets reaching for granite countertops.
As a CPA, I’ll tell you the house that lets you still save and sleep is the right house, every time.
Quick gut-check — if your money advice is coming from random online influencers, you’re playing a dangerous game. I’ve been a CPA since 1981 and writing about money since before the internet existed. Sign up for the free Money Talks Newsletter and get expert advice that’s been tested by time.
3. He’s wrong that it’s that simple — there’s barely anything smaller to buy
Here’s where Kevin loses the plot. “Just buy smaller” assumes starter homes still exist. In much of the country, they’ve been built out of the market — builders chase bigger, pricier houses, and what little is left gets bid up fast.
Telling a young couple to “buy smaller” in a market with no affordable inventory isn’t advice. It’s a hope.
4. He’s right that if you already own, you should use what you have
Not everyone reading this is a first-time buyer. If you already own, the smart move in a frozen market often isn’t selling into it — it’s improving the home you’ve got.
A home equity line of credit (HELOC) lets you tap your home’s equity to consolidate high-interest debt, fund home improvements, or cover a large expense — typically at a lower rate than credit cards or personal loans.
Money.com's home equity table lets you compare offers from multiple lenders in one place, so you can see what you may qualify for in just a couple of minutes.
5. He’s wrong that downsizing is easy money — but there’s a tool for it
For older homeowners, “buy smaller” ignores a real bind: sell the paid-off house, and you’re buying back into the same expensive market. Downsizing can cost more than staying put.
If you’re 62 or older and equity-rich but cash-tight, there’s another route. If you’re 62 or older, the equity in your home could become cash you can use now. A reverse mortgage lets eligible homeowners convert part of their home equity into funds — while keeping ownership of their home.
See how a reverse mortgage works and whether you qualify.
The bottom line
Kevin O’Leary’s tough love is half medicine, half rich-guy blind spot. He’s right that waiting for 3% is a fantasy, and that a smaller house beats being house-poor. He’s wrong that “chop chop” is a plan when there’s nothing affordable to chop down to.
Buy what you can actually afford, cut the costs you can control, and don’t torch your future to impress the neighbors.
Sources: Yahoo Finance (1); Redfin (2); CNBC (3); Freddie Mac (4).
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