As the economic recovery takes hold, rental demand is likely to remain strong thanks to the aging of the echo-boom generation into young adulthood--the years when they are most likely to form independent households. The recession has apparently led many young adults to delay living on their
own, given that the percentage of households with additional adults (persons age 18 and older other than the household head and spouse) was up 0.9 percentage point in 2008-9. This translates to 1.1 million households, which may even underestimate the extent of doubling up because surveys
may miss transient residents. As job growth picks up, more of those under age 30 should head out on their own and add to rental demand.

Although the baby boomers will not contribute much to overall rental demand, they will change the age composition of the renter population. With substantial growth in the number of elderly renters, demand for housing that meets their needs--including subsidized rentals--will increase accordingly.

Future immigration trends will also affect growth in rental households. Immigrants tend to be young adults, and foreignborn households of all ages are more likely than native-born households to rent. After slowing during the 2000s for the first time in more than 30 years, immigration will likely rebound once the economy picks up steam. Stricter government controls may, however, keep future inflows below pre-recession levels.

Attitudes about homeownership are another unknown. The ongoing weakness in house prices appears to be making renters wary about buying. In addition, a multitude of other factors--including impaired credit from the foreclosure crisis and deep recession, stricter mortgage underwriting standards, and continued uncertainty about the direction of the economy--make renting a more common choice. Nevertheless, with home price declines and low interest rates pushing affordability
indexes to record levels, homebuying activity could siphon off some rental demand.