CHART OF THE DAY: House Prices Are Getting Reasonable Again

button more charts
button chart prev
button chart next

A straightforward way of determing whether a house is fairly priced is to compare it to what that house would rent for. It’s kind of like a PE ratio. As this chart from Whitney Tilson shows, price-to-rent ratios are finally coming back in line with historical norms. But this doesn’t mean home prices have bottomed. Like anything else, they’re prone to overshoot on the way down.

Get This Delivered To Your Inbox
You can get this dropped in your inbox every afternoon as The Chart Of The Day. It’s a simple. It’s convenient. It’s free. All we need is your email address (though we’d love your name and state, too, if you’re willing to share it).  Sign up below!

Email

First Name

Last Name

State

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.