B
enzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Real estate investors have faced significant headwinds over the past two years, with high interest rates reducing transactions and prompting homeowners to stay put in their homes. This has created a shortage of properties for sale, alarming real estate investor Grant Cardone. High interest rates not only make real estate less accessible but also increase the cost of other types of debt, including credit cards, auto loans, and personal loans.

    "It's a national crisis," Cardone said, highlighting the impact of high interest rates on the economy. Mortgage rates are currently sitting at 8%, making monthly mortgage payments more expensive and discouraging people from buying homes. While high rates can help combat inflation, the rate has been steady for several months, suggesting that higher interest rates may no longer be necessary.

    The Federal Reserve anticipates two rate cuts this year, which could reduce the total rate by 0.50%. This could boost demand for mortgages and potentially increase housing prices. Many investors will closely watch the Fed's mid-July decision on interest rates, as any rate cuts may create attractive buying opportunities.

    Transactions are essential to the real estate industry, with agents relying on deals to receive commissions, lenders needing deals to collect interest payments, and investors requiring deals to expand their businesses. When transactions slow down, the entire industry suffers, prompting people to seek new opportunities. Cardone believes that the past two years have been particularly challenging for the industry due to high interest rates and low demand.