Under the Biden administration, the gap between U.S. wage increases and soaring rental costs has widened, with real estate mogul Grant Cardone attributing the disparity to current federal economic policies.

While 1.2 million new apartments have been constructed across the nation since 2020, renters find little relief as rents have climbed 30% between 2019 and 2023, outpacing the approximately 20% growth in wages during the same period.

"American paychecks have grown since the pandemic, but those gains have NOT kept up with rent prices," Cardone said on X, formerly Twitter. "You would think with all 1,200,000 new apartments being added nationwide (a fifty year high) rents would come down."

The persistent rise in rental costs, made worse by high interest rates that curb affordable home buying, poses a challenge to Americans, especially in urban centers like Miami and Phoenix. According to an analysis issued by Zillow earlier this month, Miami, which has seen wage growth above the 20% national average, experienced a 53% increase in rental prices — the most drastic increase in any U.S. market. 

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"More supply should have reduced rents, but in all 50 of the largest U.S. metros it is cheaper to rent than buy," Cardone said. "Who’s to blame? The FED under Joe Biden Administration."

Carden noted that while the Federal Reserve had raised interest rates 11 times to curb high inflation, in doing so it effectively "killed" the American dream of owning a home by making a mortgage out of reach for many.

"Interest rates on financing the ‘American dream' are now in excess of 7.5%," Cardone said, noting that the average monthly payment for a typical $417,000 mortgage is now $4,216.95, exceeding the national average rent of roughly $1,713.

That price gap, Cardone said, is pushing America toward becoming a ‘nation of renters' rather than homeowners — and the data supports Cardone’s point. 

While the average U.S. rent was $1,713 as of March, the amount varies depending on location and housing type. For example, renters in Arkansas may find more affordable options with an average rent of $1,067, but residents in California face an average of $2,521, which can strain household budgets and potentially prevent them from saving for a home.

"Smart money and investors are buying homes with cash while rates are high, and renting the house to those who can’t afford the mortgage, but can afford the rent," Cardone said. "When rates are low again, they will finance the home and continue to rent it and wait for rents to continue to go up as they have for 70 years." 

Despite some new apartment constructions that have brought rents down in areas like Austin, Texas, and Salt Lake City, high interest rates set by the Federal Reserve have restricted buying power, particularly for first-time homebuyers who are now more likely to continue renting.

As homeownership becomes increasingly out of reach for many due to those high mortgage rates, more Americans are turning to renting as a long-term housing solution rather than a temporary arrangement. 

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