Rental Rates and Housing Price Gaps – What Goes Up Must Come Down?

The International Monetary Fund has some interesting analysis (pdf) on US housing prices, with emphasis on comparison between rental rates and pricing, including some detailed data on the potential for regional corrections. Skip the writeup (for now) and head straight to the graphs at the end. (h/t Paul Kedrosky)

And in the vacancies column…

As of the second quarter – vacant home rates dipped about a quarter point to 2.8% while rental unit vacancies continued to hover in the 10% range, according to this analysis compliments of Calculated Risk.

CalculatedRisk also noted that the homeownership rate has now retreated to mid-2001 levels, meaning the ownership rate is closing in on a 50% retracement to 1995’s jump-off point.

Newton’s Law prevails?

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