Grant Cardone Foresees 100-Year Mortgages — Is the US Shifting Towards a Rental Society?
Most homeowners typically pay off their mortgage within 15 to 20 years. However, real estate mogul Grant Cardone predicts that mortgage terms could become significantly longer in the future. He believes that the key to America’s financial stability won’t be lower prices but extended mortgage durations. Cardone suggests that in the future, we might see mortgages extending to 40, 50, or even 60 years, and possibly even 100-year mortgages.
Cardone also anticipates a shift towards a rental-based economy, where Americans might rent not just their homes but also cars and even clothing. Despite this, he remains skeptical about mortgages as a path to true homeownership, arguing that having a mortgage means you don’t fully own your home.
The dream of homeownership is becoming increasingly unattainable for many Americans due to high home prices, rising mortgage rates, and a limited housing supply. This issue is particularly pronounced in larger cities, where even high-income earners struggle to afford homes. Data from the real estate investing platform Arrived shows that top earners (those in the top 30% income bracket) can’t comfortably afford homes in cities like Boston, Denver, Los Angeles, New York, Sacramento, San Diego, and Seattle. This is a stark contrast to 2001, when top earners could afford homes in some of these cities by age 24.
As a result, many potential homebuyers, especially younger generations, are opting to rent instead. Gen Z, in particular, has taken to social media to express their frustration with the current housing market, citing student loans, high mortgage payments, and low-paying jobs as barriers to homeownership. Many young people are choosing to rent luxury apartments with amenities and have no plans to buy a house.
Interest in longer mortgage terms is growing, as evidenced by a spike in Google searches for “40-year mortgage rates” and “FHA 40-year mortgage 2023.” Although these loans are currently only available to existing homeowners with Federal Housing Administration mortgages under specific conditions, the interest is clear. Extending a mortgage can lower monthly payments, but experts caution that it could lead to higher overall costs due to increased fees and interest over the life of the loan.