More U.S. citizens are choosing to rent rather than purchase homes.  The high demand for rental properties has caused rents to increase and a much-needed jolt to the housing market.  Areas that were once struggling to survive during the recession’s climax are now bustling with activity, and their economies are thriving again.  However, the financial perks are not without unfavorable effects

Individuals financially devastated by the recession have now become the housing market’s new renting constituency.  Those who lost their homes due to foreclosure have inherited poor credit, unemployed or underemployed workers find it increasingly difficult to save up the hefty down payment required of homebuyers, and immigrants who lack proper assets, credit histories, or identification are all choosing to rent rather than buy

Increasing preference for rentals

The understandable preference for rentals and the astounding number of foreclosures have left many properties vacant and subject to demise.  Amnesty International has reported that vacant homes outnumber homeless people in the U.S.  The Government Accountability Office reports that vacant homes in the U.S. increased from 7 million to 10 million between 2000 and 2010.  The financial impact of this phenomenon is staggering—tax dollars bare the brunt of maintenance costs, and cities like Detroit have spent close to $20 million since May 2009 to demolish vacant properties

The Shifting Nature of U.S. Housing Demand report issued by the U.S. Conference Board’s Demand Institute insists that home prices are expected to increase over the next several years at an annual rate of 2.5 percent by 2014 then 3 to 3.5 percent from 2015 to 2017, on average.  Meanwhile, small-town employment hubs are attracting people looking for work and cheaper living.  These towns once hit hard by high foreclosure rates are now flourishing with lower and more attractive housing prices, as is the case in places likes Buckeye, Arizona with its large Vietnamese immigrant influx

Multi-unit properties showing big growth

Multi-unit properties are the only segment of the housing sector showing substantial growth.  Developers are responding to these promising prospects with plans to build smaller homes in communities with schools, shops and life’s essentials all within walking distance

On the contrary, many residents don’t approve of the new blueprints, with overcrowding and pollution being two of their chief concerns.  However, the pursuit of appreciable economic stimulation has persuaded many cities to give industrious construction companies the green light on projects that promise to bring in much needed funds

Lack of parking spaces and less expendable cash flow will likely persuade citizens to forego their automobiles and turn to mass transportation, which reduces pollution.  A more diverse group of people in close proximity, typical in areas that have a large number of rental units, also fosters cultural diversity and a more tolerant society

More Americans to buy homes in the future because of rental demand

The rental market boom is a strong indicator that U.S. housing’s worst days are likely over.  Although home prices are expected to rise over the next decade, residents continue to seek the American dream of home ownership.  While many now rent, they are saving funds and building credit to meet home buying standards that will likely remain less stringent in order to help fill vacant homes.