Home prices swung too high and then crashed badly. But there was no notable fluctuation in rents. The chart below compares the two data points and clearly shows how home prices overcorrected in relation to rent from 2009 to 2011. Beginning this year, home prices steadily made positive gains, and are now catching up to the rise in rents. Given that rents are expected to further rise because of falling apartment vacancy rates, home values would need to continue upward movement in order to catch up fully to rent trends.

This simple home price-to-rent comparison does not even take into account the impact of home buying from lower interest rates. So even not factoring in generational low mortgage rates, homes remain a good buy. But please, stay well within your budget.

Notice: The information on this page may not be current. The archive is a collection of content previously published on one or more NAR web properties. Archive pages are not updated and may no longer be accurate. Users must independently verify the accuracy and currency of the information found here. The National Association of REALTORS® disclaims all liability for any loss or injury resulting from the use of the information or data found on this page.