CHART OF THE DAY: US Home Prices Are Unambiguously Cheap

Societe Generale Albert Edwards pointed us to this chart comparing home prices across the developed world.

For comparability purposes, the OECD present home prices based on two ratios: price-to-rent and price-to-income.  Both measures are pretty intuitive.

“But what is surprising to me about the UK is that house prices are still extremely overvalued despite the country having been at the epicentre of the global credit bust and remaining in the icy grip of private sector debt deleveraging,” said Edwards as he criticised British leadership.

“For it is also notable that in other countries which have also found themselves in the eye of the credit storm, such as Portugal, Ireland and most importantly the US, house prices are now unambiguously cheap.”

Societe Generale

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