AvalonBay Communities, one of the nation’s largest developers of rental housing, said it expects to expand its development pipeline and push rents upward because a weak for-sale housing market is pushing Americans back into apartments.

During a conference call with Wall Street analysts yesterday, AvalonBay CEO Bryce Blair said historically low home ownership rates will become profit-drivers for apartment owners in 2011 and 2012.

The national homeownership rate fell to 67 percent in the second quarter – its lowest level in a decade.

"This decline is in spite the positive effect of the federal home buying tax credit, which was still available during the second quarter," Blair said.

Absent the credit, Blair argued, homeownership rates "would undoubtedly have fallen further." Now that the credit has expired, Blair predicted further weakness in home sales because of pricing fears "and continued uncertainty over the strengths of the economic recovery."

Some analysts have predicted homeownership rates could ultimately fall to as low as 62 percent. Even a dip to 64 percent, Blair said, would create 700,000 new rental households per year. Given that, and the effective absence of new rental product coming on the market, "It’s hard to not to feel positive about the impact on rental fundamentals, both this year, but increasingly so in 2011 and 2012," Blair said.

Tim Naughton, AvalonBay’s president and COO, said the apartment REIT is already beginning to push rents upward when it rolls leases over. Nationwide, he said, same-property revenue growth was up 1.3 percent in the second quarter; in New England, he said, roll-over rent increases were up by more than 5 percent in July.