Price-to-Rent Ratios
The goal of this monthly report is to assist in more informed decision making as families across the country make their latest housing decisions. The Top 100 U.S. Housing Markets and the Waller, Weeks, and Johnson Rental Index are also helpful resources.
National Price-To-Rent: August Data
It is the change in the price-to-rent ratio through time relative to the local market's historic average that matters. Ratios above the historic average suggest renting is generally preferred, while ratios below the historic average suggest a preference for ownership. Additionally, the distance between price-to-rent scores and the local average also matters. The greater the distance above an area's average price-to-rent ratio, the more that market favors renting. The greater the distance below an area's average price-to-rent ratio, the more that market favors ownership.
BH&J National Monthly Report
The price-to-rent ratioThe goal of this monthly report is to assist in more informed decision making as families across the country make their latest housing decisions. The Top 100 U.S. Housing Markets and the Waller, Weeks, and Johnson Rental Index are also helpful resources. is calculated as local home prices to annualized rents. The ratio does not speak to housing affordability and, in general, is not comparable across different markets as cost of living, production, and incomes can vary dramatically. It is generally accepted that higher price-to-rent ratios favor renting as they indicate renting is less expensive than ownership. Conversely, lower price-to-rent ratios favor ownership.
Our monthly report extends this benchmark measure by comparing changes in the ratio across time and local market historic averages for the largest housing markets in the U.S.
In this context, it is the change in the price-to-rent ratio through time relative to the local market’s historic average that matters. Ratios above the historic average suggest renting is generally preferred, while ratios below the historic average suggest a preference for ownership. Additionally, the distance between price-to-rent scores and the local average also matters. The greater the distance above an area’s average price-to-rent ratio, the more that market favors renting. The greater the distance below an area’s average price-to-rent ratio, the more that market favors ownership.
Co-Developers
Dr. Johnson is a well-known scholar with numerous publications on the U.S. housing market, real estate brokerage, transactional real estate, and real estate investment. His recent articles have appeared in Real Estate Economics, Journal of Real Estate Finance and Economics, Journal of Housing Economics, Journal of Real Estate Research, Journal of Housing Research, The Appraisal Journal, Journal of Real Estate Practice and Education, Journal of Real Estate Portfolio Management, and Journal of Real Estate Law.
Dr. Johnson has won several Red Pen Awards for outstanding service and contribution to both the Journal of Real Estate Portfolio Management and Journal of Housing Research. He is a past editor of the Journal of Real Estate Practice and Education and is the current editor of the Journal of Housing Research.
Dr. Johnson is a member of the Board of Directors of the American Real Estate Society. He currently serves as the Associate Dean of Graduate Programs and as an SBA Communications Professor at Florida Atlantic University. Outside of his academic work, Dr. Johnson has over a decade of applied experience in real estate specializing in the marketing of corporate- and lender-owned properties.
Dr. Beracha conducts empirical research in the areas of real estate and finance. Since he received his doctorate from the University of Kansas in 2007 he has published more than 20 academic papers in leading real estate and finance journals such as Journal of Real Estate Research, Journal of Real Estate Finance and Economics, Real Estate Economics, Financial Analysts Journal and Journal of Financial Research. Dr. Beracha’s research papers were presented in many national and international conferences, won “best paper” awards and are regularly cited by the popular press.
Dr. Beracha is the managing editor of the Journal of Real Estate Practice and Education and is an elected member of the board of directors of the American Real Estate Society. In a recent research survey Dr. Beracha was included in a short “Grand Slam Authors of Real Estate” list comprised of authors who published in all five of the leading real estate journals during the 2000-2012 time period. In addition to Dr. Beracha’s scholarly work, he also has years of practical experience in the area of real estate investments and has served as a consultant for real estate development projects.
Dr. Hardin has an extensive publication record in the top real estate journals. His work has been published in Real Estate Economics, Journal of Real Estate Finance and Economics, Journal of Real Estate Research, Journal of Real Estate Portfolio Management, Journal of Real Estate Practice and Education, Journal of Property Investment and Finance, International Real Estate Review, Journal of Property Valuation and Investment, Journal of Shopping Center Research, Financial Review and Assessment Journal. He has also presented his research at major real estate and finance conferences including those of the American Real Estate Society, the Asian Real Estate Society, the American Real Estate and Urban Economics Association, the Southern Finance Association, the Eastern Finance Association and the Financial Management Association.
At Florida International University, Dr. Hardin is a Full Professor and directs the MSIRE and BBA in real estate programs. He also is Director of the Tibor and Sheila Hollo School of Real Estate and the Jerome Bain Real Estate Institute. He worked in the real estate banking industry prior to his academic career and has served as a consultant to real estate development firms, large corporations and global real estate investors and completed small development projects. Dr. Hardin worked in commercial banking and development prior to earning his terminal degree from Georgia State University.