Housing Price to Rent Ratio
While we await the latest Existing-home sales for April, to be released at 10:00am, let's have a qwuick look at a related chart.
All those Housing Bottom callers should consider the Housing Price to Rent ratio. It argues very loudly against a bottom anytime soon:
chart courtesy of Janet L. Yellen, President, Federal Reserve Bank of San Francisco
Speech to the Certified Financial Analysts Institute, Annual Conference
Vancouver, British Columbia
Janet L. Yellen, President and CEO, Federal Reserve Bank San Francisco
May 13, 2008, 10:00 AM Pacific time, 1:00 PM Eastern
Credit, Housing, Commodities and the Economy
TrackBack URL for this entry:
Listed below are links to weblogs that reference Housing Price to Rent Ratio:
I do tend to "put stock in this", but it's worth remembering rental and owned housing aren't perfect substitutes.
Ironically, one of the elements of imperfect substitution is that owned housing has greater security of tenure.
Record foreclosures may have dented that particular advantage recently.
Posted by: Estragon | May 21, 2008 2:39:08 PM
The comments to this entry are closed.