A very good example of this is the evidence that individuals failed to purchase domestic equities until January 2013, as buying stocks took a backseat to making ends meet. As it relates to housing, the stunning drop in home prices in 2007-2010 will probably continue to be associated with a more conservative view toward home ownership and with a greater desire to rent. This helps to explain the continued lackluster single-family home market.
We can see this phenomenon demonstrated in the continuing dominance of multifamily starts relative to single-family starts throughout 2012. It will be interesting to see how the enormous supply of apartments will impact rents and home prices in the coming year.
Source: Mark Hanson