Renewed health in the residential market is anticipated by The Demand Institute, which in a report stated growth in the rental segment of the housing sector should create substantial home price growth in the years ahead.
The institute notes in its report, "The Shifting Nature of U.S. Housing Demand," that high rental demand should pave the way for a 1 percent home price increase this year, and a 2.5 percent jump by 2014.
"In these initial years, the prime driver of recovery won't be new home construction, but rather demand for rental properties," said Louise Keely, chief research officer for The Demand Institute and co-author of the report. "This is a remarkable change from previous recoveries."
Bart van Ark, chief economist at The Conference Board, which operates the institute, stated he projects homeownership to remain the choice of the majority of Americans in the next couple of years.
While many consumers have expressed a preference to buy homes in recent months, as mortgage rates remain low, tight down payment restrictions could lead many Americans to start or continue to sign lease documents at rental properties nationwide.