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We keep hearing about the weak housing market all around the country. You might think that if people aren't buying they'd be more inclined to rent a place, and that theoretically should be a boost for the rental market.
Not the case, as NPR's Joshua Brockman reports.
JOSHUA BROCKMAN: Even though the home ownership rate is falling, there hasn't been a rise in the number of people renting. Mark Obrinsky is an economist for the National Multi Housing Council, a trade group for the apartment industry.
Mr. MARK OBRINSKY (National Multi Housing Council): The weak economy is sapping that demand as people go back home to live with mom and dad, or with a brother or sister, or they take on a roommate or become someone's roommate.
BROCKMAN: With so many homes and apartments on the market, rents are being held down, according to the government's consumer price index for rent.
Obrinsky says it's going to be tough for the rental market to recover until the employment market really picks up. But when the economy recovers, he expects to see a rebound in demand for apartments and rental houses. That's because tighter lending standards will make it tougher for people to buy a home.
And former homeowners, like Jesus Felizzola, are seeing the advantages of renting. He is relieved to be renting a studio apartment in one of Washington, D.C.'s posh neighborhoods.
Mr. JESUS FELIZZOLA: This is what you get for $1,800 a month - a little box in Dupont Circle.
BROCKMAN: It's a far cry from the three-bedroom house he once owned in North Miami Beach. He moved to the nation's capital to take a dream job as a medical researcher. But his experience with homeownership turned into a nightmare when he had to sell his home at a substantial loss.
Mr. FELIZZOLA: I decided to rent out of fear of not feeling comfortable about investing again. I decided to rent out of, well, I would say economic reality.
BROCKMAN: The Obama administration is likely to put more attention on renting in the coming month. Reforming the housing finance system is on its agenda.
A number of administration officials have expressed concern that there was too much of a focus on homeownership in the past. One tells NPR that, quote, "Rentals are better financial options for many Americans."
Nicolas Retsinas is the director of Harvard's Joint Center for Housing Studies. He says the federal government is now wrestling with this issue.
Mr. NICOLAS RETSINAS (Director, Joint Center for Housing Studies, Harvard): Should we continue to favor homeownership or should we seek a more balanced housing policy, talking more about giving people options, worrying more about whether people have a decent place to live, than whether they own or rent.
BROCKMAN: Attitudes about renting have also changed. Retsinas says rent is no longer a four-letter word.
Mr. RETSINAS: In the past, you rented if you didn't make enough money. You rented if you weren't ambitious. You rented if you weren't sort of smart enough. But as it turns out, as we look in recent years, renting turned out to be a pretty smart thing to do.
BROCKMAN: Another advantage to renting in this economy includes having the flexibility to move to pursue a job. That's not so easy if you own a home that you can't sell. Even though renters don't get the same kind of tax breaks as homeowners, renting may feel more secure in this uncertain economy.
Joshua Brockman, NPR News.
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