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One famous real estate investor thinks real estate is entering the “greatest” correction he’s ever seen.
Grant Cardone, owner of the real estate investment firm Cardone Capital, said in a recent television interview he predicts a massive price correction that will make it easier for everyday people to purchase homes instead of just large financial institutions.
“I just want to say that we’re entering the greatest real estate correction in my lifetime,” Cardone told Fox & Friends on Thursday. “It’s going to be a great opportunity for individuals, regular, everyday people, to actually grab trophy real estate from institutions. This has never happened in the country.”
“It’s going to be at epic levels,” he added.
Cardone blamed the Federal Reserve for “single-handedly” killing the housing market with its interest rate hike campaign.
“He [Fed Chairman Jerome Powell] has not controlled inflation. He has failed miserably. What he has actually done is created and, in the meantime, stopped the housing industry,” Cardone said. “It’s unaffordable for people to own a home today.”
The current market has proven inhospitable for new buyers, with high interest rates disincentivizing homeowners from listing their homes for sale, leading to extremely low inventory and expensive loans for the few houses that are available.
Mortgage rates have begun to trend downwards in recent weeks though, falling below 7 percent this week. They are poised to drop even further, with the Federal Reserve signaling three short-term rate cuts by the end of 2024.
Cardone predicted that once interest rates begin to come down significantly, housing prices will follow. He urged Powell to “step aside” and let the market correct itself.
“Interest rates will have to come down in order for pricing to come down. This is actually a contradiction to what most people think. But when interest rates come down, mortgage applications will go up and people will start selling their homes,” Cardone said.
Cardone, who is currently facing a class action lawsuit from investors who claimed he misled his social media followers about their future returns in real estate while downplaying the risks, also predicted in the interview that the long-term effects of the Fed’s rate hikes will turn the United States into a “nation of renters.”
“The Fed will make more renters in this country in the next two years than it has in the last 50 because mortgage applications are at all-time lows,” Cardone said.
