Historically these two measures are the best indication of when it’s a good time to invest in real estate
Rent-to-Buy and Home Prices to Income
Posted: 28 Sep 2012 07:23 AM PDT
Two common measures of home prices are comparing the costs of renting vs. buying a home and the ratio of home prices to income. Both these measures suggest this is a good time to buy. The Rent-to-Buy ratio is below its average for the 1987-2012 period by a small amount, but is headed toward neutral as home prices advance. The comparison of home prices to income is low compared to the patterns seen since 1987 and is also moving up as home prices climb faster than income. The charts show both measures. Double click on the chart for a larger image.
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