- Real estate investor Grant Cardone says the US is approaching a housing correction
- He says it will create a “great opportunity” for private individuals to buy office space and apartments
- But it won't apply to single-family homes, where renting may still make more sense
A real estate investor has said the US is entering the “biggest real estate correction” of its lifetime, with “big opportunities” for individual and family buyers.
Due to rising house prices and mortgage costs, the housing market is causing major problems for both sellers and buyers.
But private equity fund manager and real estate investor Grant Cardone told Fox & Friends that this is all about to change.
He said the correction won't affect “single-family homes,” but it will affect offices and apartments.
He said: 'It (real estate correction) will be a great opportunity for individuals, ordinary, ordinary people to actually take away trophy real estate from institutions.
“This has never happened in this country before, it will be epic.”
Real Estate Investor Grant Cardone Says We're About to Experience the 'Biggest Real Estate Correction' of His Lifetime
Rents in Manhattan fell for the first time this week, but mortgage costs remain sky-high
Currently, he said, “It is unaffordable for people to own a home these days.”
Instead, people choose to rent because it is cheaper than a mortgage, there are fewer insurance costs and there are more amenities in a purpose-built rental block.
He said the US is turning into a “renter nation.”
Cardone blames the Federal Reserve for “single-handedly” killing the housing market by raising interest rates.
He said, “He (Fed Chairman Jerome Powell) has not kept inflation under control. He failed miserably. What he has actually done is created and stopped housing construction in the meantime.”
To boost the sector, Cardone urged Powell to “get out of the way” and “let the market do its thing.”
He added: 'Interest rates will have to fall for prices to fall. This actually contradicts what most people think.
'But if interest rates fall, mortgage applications will rise and people will start selling their homes.'
House prices remain high, but Grant hopes that as mortgages become more affordable, they will fall as more people sell their homes
The tide appears to be turning — rents in Manhattan fell this week for the first time in more than two years — as a glut of empty apartments forces owners to cut costs.
Meanwhile, a separate report from real estate company Redfin painted a similar picture for the US market as a whole. Rents fell by the most in more than three years through November amid a recent vacancy boom.
Mortgage rates, on the other hand, continue to rise, with the average rising $144 to more than $2,500 in October, according to the November 2023 ICE Mortgage Monitor Report.
It now takes about 41 percent of the average household income to cover monthly principal and interest payments — this has averaged less than 25 percent over the past 35 years, ICE noted.