Cardone’s Warning: ‘If this Continues Homeownership is OVER in America’

Grant Cardone, a prominent figure in real estate and entrepreneurship, has recently voiced his concerns on the current state of the American housing market through a tweet that has caught the attention of many. He highlighted the alarming rise of the 30-year fixed mortgage rate to 6.81% this week, as reported by Freddie Mac, marking the seventh increase in eight weeks. Cardone’s warning is stark: “If this continues homeownership is OVER in America.”

Four years ago, in 2020, the average rate for a 30-year fixed mortgage was hovering around 3%. This low rate was a boon for homebuyers, making monthly mortgage payments more manageable and allowing more Americans to achieve homeownership. Fast forward to today, with rates more than double that figure, the dream of owning a home has become increasingly elusive. The direct impact of these rising rates is a significant increase in the cost of borrowing, pushing monthly mortgage payments to new highs and squeezing potential buyers out of the market.

The effects of these high rates are multifaceted. Firstly, they deter new buyers from entering the market, as the financial commitment for a mortgage becomes daunting. Homebuyers now face monthly payments that are substantially higher than they were just a few years ago, which can equate to hundreds or even thousands of extra dollars each month. This not only affects the affordability of buying a home but also impacts the overall housing market dynamics, including demand, supply, and price stability.

Cardone’s perspective isn’t just about the financial mechanics; it’s a commentary on the cultural significance of homeownership in the U.S. Traditionally viewed as a cornerstone of the American Dream, homeownership represents more than just property acquisition; it’s about financial security, personal achievement, and stability. However, with rates climbing, this dream is being redefined for many, particularly for younger generations like Millennials and Gen Z. These groups are already navigating a landscape of high student debt, escalating living expenses, and now, an increasingly inaccessible housing market.

If mortgage rates continue to ascend, the housing market will likely feel sustained pressure. Fewer people will qualify for loans, which could lead to a decrease in home sales, potentially driving down prices if supply begins to outstrip demand. However, given the persistent low inventory in many areas, this might not immediately translate into lower prices but rather into a market where fewer transactions occur, and existing homeowners are less likely to sell due to their advantageous low-rate mortgages.

Cardone’s alarm isn’t just rhetoric; it mirrors a broader sentiment of frustration and concern among Americans trying to navigate the housing market. For many, the path to homeownership might indeed be over if current trends persist, transforming what was once a common aspiration into an exclusive one. This situation underscores the need for potential policy interventions or market adjustments to ensure that homeownership remains a viable goal for future generations.

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