Interest rates affecting home purchases
“The key thing here is to take a look at sales as a place to begin because a number of persons are in no man’s land without delay in relation to people who find themselves still waiting to purchase homes,” Lucarell said. “What now we have seen in the course of the pandemic and even at the top of it’s these really low rates of interest which have crept up and at the moment are roughly over 7% depending on the realm you might be in. This creates a number of barriers for home buyers this yr. That said, nonetheless, this yr as we go forward, we’ll see a bit more swing in favor of buyers, where you may begin to see not necessarily a large drop in selling prices, but a leveling off. So it will open it up a bit,” he said.
Price rents are in a downward trend
“In my opinion, it still doesn’t match the affordability of rentals in any way,” he said. “Renting remains to be unaffordable, but it surely’s almost the least unprofitable of the 2 options. Both are hard now; rents are still high.
However, Lucarelli has seen studies showing rent relief. “We saw some positive signs within the rental market within the fourth quarter,” he said. “During the fourth quarter, rental price declines were 1% nationwide for 3 months in a row, which is sort of rare. So in 2023 it’s going to still be helpful for tenants.”
Despite a slight decline in house prices expected this yr, rents are still significantly better for a lot of consumers, he noted: “These improved conditions could be helpful for tenants,” he noted. “You will see a bit of more leverage for tenants and buyers. Still, since renting might be probably the most reasonably priced option for most individuals, you may start seeing more people, perhaps getting concessions, perhaps some sort of rent discount or incentives landlords could also be providing. We’re going to begin seeing more of this stuff this yr.”
The company has benefited from the erosion of housing affordability. For example, late last yr, the corporate partnered with the California Association of Realtors to create a set of rental courses specifically designed for real estate agents.