With more demand comes rising rents, a trend already being seen in many metro areas across the nation. Ultimately that can be a good thing for the housing market, since it generally tips more people into buying homes.
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"Rising rents have traditionally been a good factor for home sales," says Lawrence Yun, chief economist at the National Association of Realtors.
Also, with rental demand heightened, real estate investors' ears have perked up. With prices in many metro areas at historic lows, investors are taking advantage and scooping up properties to convert into rentals, Yun says.
Home sales pick up. The end sum of all these factors is an expected uptick in existing and new home sales next year. "There are so many improving factors that support home sales that we are calling for about a 5 percent increase in [existing] home sales in 2012 over 2011," Yun says.
New home sales should also see an even bigger bump between 10 and 15 percent, Yun says, because the inventory of new constructions is so low. "The builders will be ramping up production," he says.