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In a recent interview on, private equity fund manager Grant Cardone issued a stark warning, declaring that the United States is on the brink of the most significant real estate correction in his lifetime. Cardone, known for his expertise in real estate investments, emphasized that the impending correction would present a unique opportunity for individual buyers to acquire trophy properties from institutional investors.
“This is going to be the greatest real estate correction we’ve seen. It’s going to be at epic levels,” Cardone stated during the interview, underlining the magnitude of the challenges facing the real estate industry.
While Cardone acknowledges that the current housing market is fraught with difficulties for both buyers and sellers, he attributes the crisis to the Federal Reserve’s handling of interest rates. According to Cardone, the recent interest rate hikes orchestrated by Federal Reserve Chairman Jerome Powell have led to unaffordable housing prices, discouraging sellers and exacerbating low inventory issues, which, in turn, contribute to escalating home prices.
“It’s unaffordable for people to own a home today. Powell has not controlled inflation. He has failed miserably,” Cardone asserted, placing blame on the Federal Reserve for its role in hindering the housing market.
To address the crisis, Cardone suggests a unique solution – Powell stepping aside and allowing the market to correct itself. He argues that lowering interest rates is crucial to making housing more accessible, as it would lead to increased mortgage applications and encourage homeowners to put their properties on the market.
As the housing market grapples with affordability challenges, first-time buyers find their dreams of homeownership deferred due to soaring costs. Cardone predicts that if the current trajectory continues, the Federal Reserve’s policies will result in an increase in renters, with mortgage applications reaching historic lows.
Moody’s Analytics data supports Cardone’s concerns, revealing that the U.S. rent-to-income ratio declined by 0.5% in Q3, standing at 30%, a threshold indicating rent burdens for many Americans. Renters are considered “burdened” if their rent payments consume 30% or more of their pre-tax income.
In the face of these challenges, Cardone’s call for action is clear: a reduction in interest rates to spur housing market activity and address the affordability crisis. The real estate industry now watches closely as the nation navigates the complexities of a market correction that Cardone suggests will be unparalleled in its scope and impact.