Some good points made here. I believe that rental demand is somewhat elastic, because people tend to get into roomate situations as the economy worsens and/or rentals tighten. This effect on the bottom end would impact pricing throughout.

An interesting thing to note these days is that my wife and I are renting a much larger house than we intended; for just a few hundred dollars more we are in what feels to us a palace. Our rental is deep into mortgage territory, and like selling a used 2-year old Mercedes, hardly anyone touches this sort of end of the market. Great for us!