Price-to-Rent RatioCategory: Real Estate News | Permalink Published: Friday, March 26, 2010 This is the recent update on the price-to-rent ratio via the First American Core Logic price index published, Thursday March 18th 2010, for housing prices during the month of January throughout the years. During October 2004, Federal Economist John Krainer and Researcher Chishen Wei wrote a letter on the cost to lease ratios; House Prices and Fundamental Value. Kainer and Wei presented a price-to-rent ratio by the use of the OFHEO house price index and the Owners' Equivalent Rent (OER) from the BLS. The graph below uses the First American information. It illustrates the price-to-rent ratio (January 2000 = 1.0).
It implies that housing values are, even now, a little too costly on a nationwide basis. However, it does look as if values are a lot closer to the bottom rather than the top. In addition, OER declined to some extent once more in February. Even though the majority of the declines have been very minute, the price index has decreased for 6 of the prior 8 months. While countless rents continuing to fall, the OER index will most likely carry on with its gradual decline; ever-increasing the price-to-rent ratio. Other Recent ArticlesCall Us Today!
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About This Page: This is the recent update on the price-to-rent ratio via the First American Core Logic price index published, Thursday March 18th 2010, for house prices during the month of January throughout the years.
