Interest rates affecting home purchases

“The main thing here is to look at the for sale as a starting point because a lot of people now are in no man’s land, so to speak, when it comes to people still waiting to purchase homes,” Lucarell said. “What we saw during the pandemic, and even in the tail end of it, was those really low interest rates crept up and now they’re over 7% roughly, depending on what area that you’re in. This is creating a lot of barriers for people to purchase homes this year. That said, though, for this year as we go forward, we will see swinging a little bit more in favor of buyers where you’re going to start to see not necessarily a huge decrease in for sale prices but a leveling out. So, it will open things up a little bit,” he said.

Rentals are in a downward trend pricewise

“It’s still not in any way shape or form going to, in my opinion, match what the affordability is for rentals,” he said. “Rentals are still unaffordable, but it’s almost like what is the least unaffordable of the two options. Both are tricky now; rentals are still high.”

Yet Lucarelli has seen studies pointing to rental relief. “We have seen some positive signs on the rental market in the fourth quarter,” he said. “In quarter four, rent price decreases were a 1% decrease on a nationwide basis for three months in a row, which is kind of uncommon. So, it’s still going to be in favor for renters in 2023.”

Despite the small decrease in home prices expected this year, rentals are still far more advantageous for many consumers, he noted: “Those improved conditions could be advantageous for renters,” he noted. “You will see a little more leverage for renters and buyers. Still, renting being probably the most attainable option for the majority of people,  you will start to see more people maybe secure  concessions, maybe some discount in rent or incentives that landlords might be providing. We’re going to start to see more of those things as we go through this year here.”

The company has benefited from the erosion in housing affordability. At the end of last year, for example, the firm partnered with the California Association of Realtors to create a set of rental-specific course curriculum designed specifically for real estate agents.