Billionaire investor Leon Cooperman says the S&P 500 won't hit a new high for years – and house prices will probably fall

• Leon Cooperman told Insider in an interview he thinks stocks are overvalued.
• The billionaire investor doesn't expect the S&P 500 to hit a fresh high for a long time.
• A "rolling correction" is underway, and house prices are likely to drop, Cooperman says.

Leon Cooperman says stocks are overpriced, and the S&P 500 won't notch a fresh high for a very long time.

"I made my money being a bull, but I find myself somewhat pessimistic at the present time," the billionaire investor and philanthropist told Insider in an interview this week.

More than a decade of near-zero interest rates and gratuitous government spending have "pulled forward demand in a dramatic way," driving up asset prices and running up the national debt, he said. "Ultimately, the piper has to be paid."

However, Cooperman isn't quite as bearish as other market gurus like Jeremy Grantham and John Hussman.

"I don't think we're in a bubble, I think we're in a rolling correction," he said, before adding that it will likely "take a long time for us to work out the problems."

Cooperman predicted the S&P 500 — which has returned at least 12% in five of the last seven years — would underperform for the next few years, and not surpass its current record of about 4,800 points for a long while.

Buying an index fund won't be a winning strategy, and investing will more of a stock picker's game, he said.

The former boss of Goldman Sachs' asset management arm, who converted his Omega Advisors hedge fund into a family office in 2018, pointed out there's already been a bear market in the vast majority of stocks.

A handful of Big Tech names including Tesla, Nvidia, and Microsoft have pulled the major indices higher this year, but exclude the so-called Magnificent Seven and stocks are virtually flat.

Cooperman also touched on the housing market, which saw prices jump by more than 5% to a record high in the first seven months of this year, despite mortgage rates surging to multi-year highs.

Home values have been shored up by a decades-long shortfall in the number of new homes built each year. Prospective sellers have also balked at listing their homes and taking on a new mortgage when 30-year rates are about 8%, compared to around 3% at the start of 2022.

The veteran investor said he expects home prices to fall due to the current affordability crisis. Many buyers aren't willing or able to pay top dollar for their next home and take on a painfully high monthly mortgage payment.

Cooperman, who recently published a memoir titled "From the Bronx to Wall Street: My Fifty Years in Finance and Philanthropy," has sounded the alarm on stocks a few times this year.

He warned in February that the S&P 500 was likely to bottom around 3,100 points, or 35% below its January 2022 peak. Moreover, he cautioned in June that Nvidia stock surging by around 200% this year was "not going to end well."