(GoRealNewsNow.com) – In a stark warning that all Americans should take note of, renowned private equity fund manager Grant Cardone has predicted what he believes to be the onset of the largest real estate correction in his lifetime.
Cardone, known for his insights into the real estate sector, envisions this correction as a unique opportunity for individuals to acquire premium properties from institutional holders, a phenomenon he asserts has never occurred in the U.S. before.
Cardone’s forecast of an “epic” level correction comes amid a challenging housing market marked by high interest rates and elevated housing costs. These factors are contributing to low inventory as sellers withdraw from the market, further pushing home prices upwards.
Highlighting the affordability crisis, Cardone criticized the Federal Reserve’s role in the current state of the housing market. He blamed Fed Chairman Jerome Powell for failing to control inflation and, in doing so, causing stagnation in the housing industry. According to Cardone, Powell’s interest rate hikes have been detrimental, leading to a situation where owning a home is increasingly unattainable for many Americans.
In his view, the solution lies in a market-driven correction. Cardone suggests that Powell should step aside, allowing interest rates to decrease naturally. He argues that this decrease in interest rates would, contrary to popular belief, lead to a drop in housing prices, subsequently increasing mortgage applications and revitalizing home sales.
The impact of the current housing market extends beyond potential homeowners to those renting properties. A report from Moody’s Analytics indicated a marginal decline in the U.S. rent-to-income ratio (RTI) in Q3, settling at 30% — the threshold for being considered rent-burdened. This statistic underscores the economic strain faced by renters, who are deemed burdened when their rent consumes 30% or more of their gross income.
Cardone also expressed concerns about the broader societal implications of these trends. He predicted that the Federal Reserve’s policies would significantly increase renters over the next two years, surpassing any increase seen in the past half-century. According to Cardone, this shift is primarily driven by the plummeting rates of mortgage applications, a direct consequence of the unaffordability of homes.
Overall, Cardone’s analysis paints a picture of a real estate market on the brink of a historic correction, with significant implications for homeowners, renters, and the broader economy. His insights suggest that the coming years may bring substantial changes to the landscape of property ownership in the United States.