With gas prices hitting record highs the past few years, long commutes into city centers are becoming pricier, and current and future homeowners are thinking more about proximity to work and play when looking for housing. There's a new emphasis on smaller, better located homes, Morici says, prompting more construction of multi-family residences closer to cities.
The legacy of the housing bubble and the still-unsteady jobs market has also played a role. "Many young workers may need to move to stay employed and are wary of being tied to a house they may not be able to sell," Morici says. "Hence, more young families are opting to rent."
All of this adds up to more challenges for the housing market when it comes to selling through the enormous overhang of supply, and calls into the question the dynamics of the housing market going forward. After all, rental housing tends to be concentrated in urban areas, not the suburbs.
So does a new preference (and in some cases necessity) to rent mean an end to suburbs and a revival of downtown, city living?
Thanks to Fred Pilot for sending this link. James Howard Kunstler has been making this point for years now, but in much more scathing terms. He thinks that instead of our young people learning how to make cities more livable they should be learning how to take care of the mules they will soon be riding.