Through my limited research but from being both a renter and now a home owner, renting offers a ton of flexibility for a fixed amount. My personal water heater just went out. $900. Need a new snow blower 500-$1000. Remodeled a living room with fireplace $3000. Redid plumbing main line $2000. A renter doesn't need to worry about any of these costs.
Compared to a friend of mine that rents an apartment who is going on a road trip this weekend. He pays his rent and goes about his day. I don't envy him as I knew my ownership costs up front and am good with personal finance. I am obviously working towards owning rental. But that's the difference. He's not worried about a snow blower, water heater, etc. He pays his $1200-1500 a month and is happy.
On the flip side you find that $1000/month in rent crazy as did I. And it's becuase we value a dollar differently. I refused to pay more than $600/month in rent because I didn't care about swanky granite and pools and downtown views. (I was also single no kids) I knew if I had a reasonable roof over my head, close to work, I could save the difference to purchase a property for the cost most people rent at.
Now that I'm married I can especially see families looking for an updated comfortable space for reasonable rent. They get the appearance of owning a home, the stability of a home, without the financial responsibility. It takes a lot of time and sacrifice to save financial resources to buy and for some it's not worth it.
Remember they could pay $500 a month to bank the other $500. So for a $7,000 down payment it would be 14 months of saving $500 no touching it. They would also be shopping the $200k range that doesn't offer much for updated homes in my area. 1600 sq ft ranch but usually 60s era outdated.
Now to save that $500 they would live in a less desirable location or place. they would end up doing laundry at a laundry mat. or need roommates. or live too far from work/school etc. So the trade off becomes a really lousy place for $500 only to upgrade to a non updated house that you own. or just pay $1000 upfront and get an updated place in a nice location.
