Most homeowners pay off their mortgage within 15 to 20 years, but real estate mogul Grant Cardone says we could see substantially longer mortgage terms in the near future.
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“The savior of America will not be lower prices, it will be longer mortgages,” he warned in a December TikTok video, Moneywise reported. “In your lifetime, you will see mortgages go from 30 to 40, 50 and maybe even 60 years. You could, if you live long enough, see a 100-year mortgage in America.”
Cardone also sees a shift toward becoming a renter nation, where Americans will rent cars, where they live and maybe even their clothes.
But Cardone is still skeptical about the role of mortgages in achieving true homeownership, explaining that a mortgage is just a fancy way to say you “own” something you don’t truly own.
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Americans Do Not Believe They Can Afford To Buy a Home
Homeownership has become increasingly out of reach for many Americans thanks to elevated home prices, higher mortgage rates and limited housing supply. Affording a home in larger cities is difficult for the average earner, but even well-off Americans are struggling, CBS News reported.
According to data from real estate investing platform Arrived, higher income earners (those in the top 30%) can’t comfortably afford to buy a home at any age in Boston, Denver, Los Angeles, New York, Sacramento, San Diego and Seattle. In 2001, the top 30% of income earners could afford homes in some of these cities as early as age 24.
This has caused many aspiring home buyers, particularly younger generations, to choose renting over buying.
Gen Z has taken to social media in recent months claiming that it’s nearly impossible to buy homes in the current economy, Fox Business reported, citing student loans, high monthly mortgage payments and low-salary job opportunities. Instead, younger people rent luxury amenities-filled apartments, and some have said they have no plans to ever purchase a house.
Last April, Google searches for “40-year mortgage rates spiked 450%,” and searches for “FHA 40-year mortgage 2023” jumped more than 2,650%, MarketWatch reported. This loan product is only available to current homeowners who have Federal Housing Administration mortgages under unique circumstances, but Google searches show the interest is there.
Extending a home loan can reduce your monthly mortgage payments, but experts warn that borrowers may end up paying much more in fees and interest over the life of the loan.
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This article originally appeared on GOBankingRates.com: Grant Cardone Predicts 100-Year Mortgages — Is US Becoming a Renter Nation?
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