A positive in the commercial real estate sector may be a sign of better things to come in residential housing down the road, or that's the theory. "As rents rise and the cost of home ownership declines, owning is becoming more attractive," notes California real estate analyst John Burns.

Photo by: Simon Law

Apartment demand is rising, and supply has fallen to low levels. In fact, net absorption nationally increased by 84,000 units in Q3, which pushed vacancy rates down to 7.2 percent, according to Reis. Rents didn't grow by a lot nationally, up just 0.6 percent, but in larger markets rents are making bigger gains.

"The strong demand is driven by favorable demographic trends, rising household formations and ongoing shift to rentals," notes a report by Prudential Real Estate Investors. In fact, researchers there predict that a slew of "echo-boomers" reaching prime renter age, combined with a brighter employment picture, "should produce roughly 5 million new renter households over the next five years." They claim there is not nearly enough supply for that, which would force rents up.

“Multifamily housing is the one commercial sector that has held on relatively well in the past year, and can expect the best performance in 2011,” writes National Association of Realtors chief economist Lawrence Yun in a report released today. He predicts rents will rise one to two percent next year.

Is that really enough to push people back to home ownership? Well, on the one hand, mortgage applications to purchase a home jumped last week, despite rising rates. "The increase in purchase applications last week aligns with other incoming data suggesting that consumers are feeling somewhat more confident with their financial situation," said Michael Fratantoni, MBA's Vice President of Research and Economics.

There was also the small issue of a shortened previous week due to Veteran's Day, but the Mortgage Bankers Association's purchase index is at its highest level now since the expiration of the home buyer tax credit. Still, one week does not a trend make.

Fannie Mae's National Housing Survey, released last week, showed Americans are still very skittish about housing as an investment, with fewer thinking it's a good time to buy than in the first half of this year. More actually think it's a bad time to buy.

"Our survey shows that Americans' declining optimism about housing and their personal finances is reinforcing increasingly realistic attitudes toward owning and renting," notes Fannie's Chief Economist Doug Duncan. Respondents just don't think the market has bottomed yet and don't expect home prices to rise; an increasing number think prices will fall further. That doesn't make for a great investment opportunity.

And I think that's the key.

Rents may be rising, which means Realtors will offer ever-more charts comparing home affordability to the deteriorating economics of renting.

But it's not about affordability anymore; it's about investing, and a home still isn't a great investment right now. Even the rich are turning to rentals now, according to a report by my CNBC.com colleague, Joseph Pisani. High-end investors would rather put their cash somewhere other than real estate right now, after so many lost so much during the housing bust.

While the housing market is cyclical, and prices will arguably rise again, this latest, unprecedented housing crash changed the fundamental perception of housing for good. As Americans are bombarded with news reports and entertainment shows teaching real estate negotiation, comparison, upgrades and income opportunities, they now understand the economics of housing, and increasingly consider a home's investment value over its basic purpose. Fewer Americans take pride in home ownership. Realtors will tell you it is still your most emotional purchase, but I believe it has become a far more studied and calculated investment than ever before.

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