'He Should Get Out Of The Way' — Grant Cardone Says Jerome Powell Has Failed Miserably, Fed Has Single-Handedly Killed The Housing Market — Expect More Renters In The Next 2 Years Than In The Last 50

Grant Cardone, a prominent private equity fund manager and real estate investor, recently addressed the state of the real estate market, indicating what he perceives as the beginning of the industry’s most significant correction in his lifetime. 

Speaking on “FOX & Friends,” Cardone outlined myriad challenges facing buyers, sellers and real estate agents, exacerbated by rising interest rates and escalating housing costs.

“The housing market is in a state of flux, making it increasingly difficult for people to afford homes,” Cardone said, attributing this to the Federal Reserve’s interest rate hikes. He criticized these hikes for “single-handedly” killing the housing market and expressed disappointment in Federal Reserve Chairman Jerome Powell’s efforts to control inflation.

Cardone elaborated on his views regarding the Federal Reserve’s role, particularly concerning interest rates.

“He should get out of the way. There’s no time in history in my lifetime that the Fed actually controlled interest rates. Supply and demand is what controls interest rates as long as people are spending their money,” he said when asked about his recommendations for Powell. 

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This perspective came against the backdrop of a market troubled by rising home prices and a scarcity of inventory, which has created a challenging landscape for those looking to buy or sell property.

The situation has not only affected buyers and sellers but also real estate agents, many of whom are struggling to pay rent for their offices. Cardone highlighted the challenges faced by first-time homebuyers and renters, citing the U.S. rent-to-income ratio (RTI) of 30%, indicating a substantial burden on many renters, according to Moody's Analytics. 

“The Fed’s policies will result in more renters in the next two years than we’ve seen in the last 50,” Cardone said, suggesting that the middle class is bearing the brunt of these policies. He urged the Federal Reserve to step aside and let market forces naturally dictate interest rates, believing this would lead to a decrease in housing prices and an increase in market activity.

Amid these challenges, Cardone sees a silver lining, predicting that the ongoing market correction will offer unprecedented opportunities for people to acquire high-value real estate from institutions. This scenario, he claims, is unprecedented in the U.S. and is expected to reach “epic levels.” He underscored the unaffordability of homeownership, noting the significant gap between mortgage costs and rent, as well as additional expenses like insurance and private mortgage insurance (PMI). According to Cardone, this economic pressure is shifting more people toward renting, leading to a new paradigm where individuals might “own nothing and be happy about it.”

Cardone also pointed out the evolving preferences and lifestyle choices of younger generations, who are increasingly attracted to the amenities offered by modern apartment complexes. These complexes, he said, provide an appealing alternative to traditional homeownership, allowing people to live in desirable locations for shorter periods, as opposed to the long-term commitment of a 30-year mortgage.

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