Are Higher Rents the Key to the Recovery?

Over the past few weeks, I have had several first time home buyers contact me looking to start their home search. In my preliminary conversations with these buyers, many of them have told me that the reason they decided to purchase was because they were informed that their rents were going to increase significantly at the end of their leases. After speaking to some of my friends that are property managers, they informed me that vacancy rates are starting to drop significantly.
With numerous home owners being forced to rent following a foreclosure or short sale, apartments complexes have seen an up tic in applications over the past 12 months.
Many economist are speculating that consumer confidence in the economy is the reason more buyers have recently gotten pre-approved. This may be true in some instances but consumers are ultimately motivated by what makes sense for them financially. Furthermore, if you can own a home for less than it costs to rent one, it is in your best interest to buy.
This market has created the perfect storm to drive buyers back into the game and off of the proverbial fence. Simply put, it's supply and demand. An increased demand for apartment housing has empowered the land lords and management companies to gradually increase their rents as their vacancies have disappeared and their fixed supply is totally leased. It appears that the market is reaching its tipping point and if this trend continues, more and more renters will seek to purchase homes. That is great news for the real estate brokerage community.
Now if only the banks would start lending again...but that is a topic for another day.