Another factor is that for much of the past two decades, there was a self-fulfilling prophecy that real estate prices would continue to climb indefinitely. Buying a home was a no brainer decision that would bring asset appreciation and tax deduction benefits to the owner.
Post 2008, I imagine that much of the country is unsure that such a price increase will occur over the next decade. Faced with an uncertain future value of a home versus a defined cost for renting an apartment, perhaps more people will choose renting to avoid facing cognitive dissonance over this matter.
If someone has the money, he/she can buy a few properties for cheap and rent them out (probably make more in rent than the mortgage, if they take out a loan), no?
That very much depends on several factors, including:
1) the original price of the home and the "well being" of the neighborhood therein. Oftentimes, high mortgages and property taxes can nullify any perceived gains.
2) rentals are seen as income (whether they break even or not) so they are not eligible for the same refinancing opportunities that one may find with a residence.
3) rentals, depending on the home and the tenants, aren't always low maintenance. There are ways to let others handle this for you, but that taps into any revenues as well.
All in all, in desirable locales (e.g. SF Bay Area), unless a property was snatched up pre-2007, many landlords I know are not breaking even. Finding "deals" from foreclosures, or severely depressed areas, were the main recent opportunities for many (IMO).
Post 2008, I imagine that much of the country is unsure that such a price increase will occur over the next decade. Faced with an uncertain future value of a home versus a defined cost for renting an apartment, perhaps more people will choose renting to avoid facing cognitive dissonance over this matter.