Grant Cardone Forecasts Supply Imbalance As Rent Growth Flatlines, Creating a Boon for Investors
In the ever-evolving landscape of U.S. real estate, the latest insights from renowned real estate mogul Grant Cardone have sparked considerable interest among investors and industry analysts alike. According to Cardone, the stagnation in U.S. apartment rent growth, which has remained flat since August of last year, is poised to create significant opportunities for savvy investors in the coming years.
The Current State of Rent Growth
As highlighted in a recent post by Cardone on X (formerly Twitter), the U.S. apartment rent growth has stabilized at zero, as illustrated by a graph from RealPage Market Analytics. This plateau in rent growth is not merely a blip; it signals a potential shift in the market dynamics that could have far-reaching implications for both renters and investors.
Cardone asserts that this stagnation will likely halt new construction projects, leading to a "MASSIVE supply problem" in the future. He predicts that this imbalance will benefit real estate investors with a projected rent growth of 25-30% starting between 2026 and 2028. Such a forecast is not just speculation; it is grounded in the current economic climate and demographic trends.
The Home Buying vs. Renting Gap
In another insightful prediction, Cardone noted that the gap between the costs of buying a home and renting has reached a 50-year high. This disparity is expected to drive more individuals toward renting, further exacerbating the supply-demand imbalance in the rental market. Cardone anticipates that rents could average around $2,800 per month by 2034, making the rental market an attractive investment opportunity for those looking to capitalize on the shifting trends.
Supporting Data from Yardi Matrix
Research from other real estate analytics firms corroborates Cardone’s observations. A recent report from Yardi Matrix indicated that the U.S. average asking rent rose by $8 to $1,721 in March, marking a 0.9% year-over-year increase—the largest gain in 20 months. Additionally, rent for single-family homes saw a 1.2% increase year-over-year, reaching an average of $2,144.
Yardi Matrix emphasized that the multifamily sector demonstrated resilience despite economic challenges. The report noted that demand remains robust, fueled by job growth, strong wage increases, and immigration, which collectively contribute to household growth. While one month of data is insufficient to establish a definitive trend, the uptick in rents is encouraging and aligns with historical averages prior to the pandemic.
Top Markets for Rent Growth
Despite the overall stagnation in rent growth, certain markets continue to outperform. According to Yardi Matrix, the following cities have shown the highest year-over-year rent growth:
- New York City: 5%
- Columbus, Ohio: 4.5%
- Kansas City: 3.7%
- Indianapolis: 3.5%
- New Jersey: 3.4%
- Chicago: 3.1%
- Washington, D.C.: 2.8%
- Boston: 2.6%
- Philadelphia: 2.2%
- Minneapolis-St. Paul: 2%
Interestingly, while Northeast and Midwest markets are thriving, regions like Austin, Texas, have experienced declines in rent growth, with a notable drop of 5.9%.
The Future of Multifamily Loans
Despite the flat rent growth, the market has not yet experienced distress, primarily because borrowers are extending their loans. Yardi Matrix’s database indicates that out of 58,000 multifamily loans totaling $1.1 trillion, $150 million in loans on 6,800 properties are set to mature by the end of 2025, with an additional $525 billion maturing by the end of 2029. This extension of loans suggests a level of confidence among investors and lenders that the market will rebound.
Conclusion: A Boon for Investors
As Grant Cardone forecasts a significant supply imbalance in the rental market, the implications for investors are profound. With rent growth expected to surge in the coming years, those who strategically position themselves in the real estate market now may reap substantial rewards. The combination of a high home-buying versus renting gap, coupled with the potential for increased demand and limited supply, creates a fertile ground for investment opportunities.
In this dynamic environment, staying informed and agile will be key for investors looking to navigate the complexities of the real estate market. As Cardone aptly puts it, the current stagnation may just be the calm before a significant storm of growth in the rental sector.