In a post for Standard & Poor’s Housing Views blog, David Blitzer, chairman of the index committee at S&P Indices, writes that an analysis of the most recent Case-Shiller price index and data from the Census Bureau shows that the rent:buy ratio has returned to its long-term average after many years when buying was far more expensive than renting. Blitzer writes that during the 1990s renting was more costly than buying a home, then surging prices during the housing boom made buying more expensive. Since the post-boom drop in values, however, the ratio has returned to normal. Comparisons of home prices to per capita disposable income also show a return to long-term averages. According to Blitzer, the data means that prices seen during the peak of the housing bubble were not normal and that homebuyers shouldn’t expect a return to the volatility seen over the past decade. More here.
