USA: Rent-to-price ratio back to pre-bubble era

You actually begin to hear some commentators saying that the US economy in 2013 could start looking a bit more positive. It’s usually random statistics that start falling into line that eventually come together to make a sunnier-looking jigsaw puzzle. So here’s hoping that news of the rent to price ratio of homes in the United States returning to pre-bubble era values is one of those pieces falling into place. (This basically means that the cash a home could produce through rent is now roughly in line with its market price).  Only trouble is that the economist Richard Koo (Nomura) who produced the research thinks that poor policy decisions could send prices still lower. Still, you take your optimism where you can get it these days. The crisis began, arguably, with the US resi sector. It’s as good a place as any to look for the end of the tunnel. (more at FT Alphaville here) (Q&A with Koo in the Economist here)


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