After the Crash: How Will People Live and Spend in the New Economy?

Kathleen Madigan takes a look at new research that considers the shift in America's living situations, and what it means for consumer behavior.

2 minute read

May 20, 2012, 5:00 AM PDT

By Ryan Lue


With the recent collapse of the housing market on one hand and an ever-tighter rental market on the other, Americans are finding it increasingly difficult to keep a roof over their heads. Even so (or is it accordingly?), the majority of Americans still aspire to own their own home, according to a recent study by the Demand Institute, an arm of the U.S. Conference Board.

Entitled "The Shifting Nature of U.S. Housing Demand," the report suggests that the housing sector is ready to turn around – but that it won't be back to business as usual, even after prices pick back up.

"The first stage of this recovery will be led by rental properties," Madigan explains. "Past homeowners who lost their houses to foreclosure, young adults who are now living at home or who haven't saved a down payment, and new immigrants will drive the demand to lease rather than to buy."

"Homeownership isn't dead, however, argued Louise Keely, chief research officer at the Institute and one of the study's authors. It will simply be delayed, because consumers are still repairing their finances, and reconfigured, because big is no longer better in housing."

What's more, tenants and prospective homeowners are beginning to realize they can't afford to occupy such large spaces, even in the suburbs, where lower prices are offset by the cost of driving long distances. Smaller homes mean new spending habits, as consumers realize they don't have the room for a home gym or a storage room, and turn to businesses to fill the gap. "Almost every consumer-facing industry will feel this effect as consumers adapt," the report argued.

Tuesday, May 15, 2012 in The Wall Street Journal

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Get top-rated, practical training

Wastewater pouring out from a pipe.

Alabama: Trump Terminates Settlements for Black Communities Harmed By Raw Sewage

Trump deemed the landmark civil rights agreement “illegal DEI and environmental justice policy.”

April 13, 2025 - Inside Climate News

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

April 16, 2025 - Diana Ionescu

Black and white photos of camp made up of small 'earthquake shacks' in Dolores Park in 1906 after the San Francisco earthquake.

The 120 Year Old Tiny Home Villages That Sheltered San Francisco’s Earthquake Refugees

More than a century ago, San Francisco mobilized to house thousands of residents displaced by the 1906 earthquake. Could their strategy offer a model for the present?

April 15, 2025 - Charles F. Bloszies

People walking up and down stairs in New York City subway station.

In Both Crashes and Crime, Public Transportation is Far Safer than Driving

Contrary to popular assumptions, public transportation has far lower crash and crime rates than automobile travel. For safer communities, improve and encourage transit travel.

April 18 - Scientific American

White public transit bus with bike on front bike rack in Nashville, Tennessee.

Report: Zoning Reforms Should Complement Nashville’s Ambitious Transit Plan

Without reform, restrictive zoning codes will limit the impact of the city’s planned transit expansion and could exclude some of the residents who depend on transit the most.

April 18 - Bloomberg CityLab

An engineer controlling a quality of water ,aerated activated sludge tank at a waste water treatment plant.

Judge Orders Release of Frozen IRA, IIJA Funding

The decision is a victory for environmental groups who charged that freezing funds for critical infrastructure and disaster response programs caused “real and irreparable harm” to communities.

April 18 - Smart Cities Dive