Home Price To Rent Ratio At Extremes
Updated
in a previous post, I covered "Home Prices Peaking Relative To Household Income"
In this post we see Home prices to rent have also peaked at previous highs double peaking.
The first peak was caused by lower interest rates. The second peak was caused by low rates plus Massive Deficits
with helicopter money.
Note how excessive deficits and lower rates since 2000 have not only dwarfed the 70's peak but it made owning a
home extremely expensive with the exception of a financial collapse. However, it has been profitable to own a
home during that time period. As long as home prices keep rising it works great until it doesn't.
It is the "doesn't" part that should worry us all.
I am very interested to see when this ratio falls to more favorable levels, what the macro economy will look like.
In this post we see Home prices to rent have also peaked at previous highs double peaking.
The first peak was caused by lower interest rates. The second peak was caused by low rates plus Massive Deficits
with helicopter money.
Note how excessive deficits and lower rates since 2000 have not only dwarfed the 70's peak but it made owning a
home extremely expensive with the exception of a financial collapse. However, it has been profitable to own a
home during that time period. As long as home prices keep rising it works great until it doesn't.
It is the "doesn't" part that should worry us all.
I am very interested to see when this ratio falls to more favorable levels, what the macro economy will look like.
Note
Home prices to rent ratio continue to retrace as expected.Note
The home price-to-rent ratio continues to fall.
Real Macro Economic Investing
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