Real estate tycoon blames Fed boss Jerome Powell for housing market 'crisis'

Daily Mail​

a day ago

A real estate tycoon has hit out at Federal Reserve chair Jerome Powell for the challenges facing the housing market.
Grant Cardone claimed that Powell, who leads the committee that sets interest rates, has caused a 'housing crisis.'
The CEO of Cardone Capital told Fox Business that Powell 'has done more damage to the middle class and to housing in this country than any other single Fed or any decision that has ever been made out of Washington, D.C.'
Cardone blamed high interest rates - which the Fed has set in an attempt to tame years of sky-high inflation - as the reason Americans are struggling to afford homes.
'That's why you have 500,000 more homes listed than buyers for those homes,' he told the outlet.
'When the rates come down, prices will also come down with it because you'll have more supply in the marketplace and supply is what controls prices.'
The Fed's benchmark rate strongly influences mortgage rates, currently around 7 percent, so when it is higher it makes home ownership more expensive.
The Fed has kept its benchmark rate steady between 4.25 and 4.5 percent since December.
At the last rate-setting meeting in May, Powell warned that Trump's tariffs had raised the risks of higher inflation and unemployment, and therefore the central bank could not cut rates.
'If the large increases in tariffs that have been announced are sustained, they're likely to generate a rise in inflation, a slowdown in economic growth and an increase in unemployment,' Powell explained.
Rising prices and more unemployment threatens the Fed's dual mandate to keep prices in check while ensuring a healthy labor market.
However, high rates have 'frozen' the housing market as those on cheaper mortgage deals are not willing to move and refinance at a higher rate, which would add hundreds of dollars to their monthly payments.
Further to this, mounting insurance premiums and growing fears about a possible recession are putting buyers off.
Now an astonishing one in seven buyers are bailing on deals at the last minute, leaving more supply than demand in the market and putting downward pressure on prices.
Cardone told Fox Business that if the Fed lowered interest rates it would 'stimulate' activity in the market which would in turn boost the economy.
'When you have a high supply but no demand because rates are too high, you don't have buyers coming in to reach those homes [so] the prices stay up,' he said.
The CEO of Cardone Capital told Fox Business that Powell 'has done more damage to the middle class and to housing in this country than any other single Fed or any decision that has ever been made out of Washington, D.C.'
Buyers are pulling out of home sales as the market remains 'frozen'
'If you want homes to move in this country, we need investors back into the marketplace and we need buyers back in the marketplace able to get a low interest rate,' Cardone continued.
The Fed has been under pressure from the White House to cut rates, with Trump even threatening to fire Powell from his position earlier this year.
Trump later backtracked, but has continued to lay the responsibility for bad economic news at the Fed leader's feet.
Last week Trump blamed a poor jobs report on high interest rates, and once again publicly called on Powell to cut.
Private payrolls increased by only 37,000 jobs last month, a far cry from analyst projections and the worst private job hiring slump since March 2023.
Economists polled by Reuters had forecast private employment increasing 110,000 following a previously reported gain of 62,000 in April.
'ADP NUMBER OUT!!! 'Too Late' Powell must now LOWER THE RATE,' Trump said in a Truth Social post following the release of the data.
'He is unbelievable!!! Europe has lowered NINE TIMES!'
The European Central Bank has only cut interest rates seven times, with its latest slashing coming in mid-April.