Published by FOX Business | August 27, 2023
Kevin O'Leary predicts the 'very short term' mayhem will begin this fall
“Shark Tank” investor Kevin O’Leary revealed the cold hard truth on America’s housing market, Tuesday, warning that September will be the start of “real chaos” for the U.S. economy.
“This was inevitable. We talked about it six weeks ago, and now you’re just starting to see the chips start to fall. The layering is as follows: The regional [banks] don’t know yet what their capital requirements are going to be. So, their loan books have closed like a turtle in a shell,” he explained during an appearance on “Kudlow.”
The Federal Reserve’s aggressive interest-rate hike campaign sent mortgage rates soaring above 7% for the first time in nearly two decades, cooling the post-COVID, red-hot housing market.
Rates have been slow to retreat, hitting a fresh two-decade high last week. Freddie Mac reported that rates on the popular 30-year fixed mortgage are hovering around 7.09%, well above the 5.13% rate recorded one year ago and the pre-pandemic average of 3.9%.
Additionally, the Federal Reserve approved yet another rate hike in July, setting the key benchmark federal funds rate to the highest level since 2001.