Your analysis is generally OK. But, by the “Law of conservation of homes”, all those foreclosed homes have to eventually fall into rental space, in the absence of owner occupants. So, though the number of renters will skyrocket, the number of rental properties will also skyrocket. On the whole, the existing excess inventory and the fact that builders will keep on building assures plentiful housing. There may be local hiccups, but on the larger scale it is going to be excess supply chasing demand leading to drop in rents.
