Home Prices / Rent
Selected range · January 1981 — April 2026
About this chart
The Home-Prices-to-Rent Ratio compares changes in U.S. home prices with changes in the cost of renting a primary residence.
The home-price component measures the movement of U.S. residential property values. The rent component is the Consumer Price Index for rent of primary residence in the U.S. city average.
Both inputs are indices rather than dollar prices. The ratio therefore compares how home prices and residential rents have changed relative to their respective index levels.
The ratio rises when home prices increase faster than rents. This can happen because home prices rise strongly, rent growth slows, rents decline relative to home prices, or several of these changes occur together.
A higher ratio means that home prices are relatively elevated compared with rents versus the model’s historical relationship. This may be associated with strong demand for homeownership, low mortgage rates, easier credit conditions, limited housing supply, or expectations of future property-price growth.
The ratio falls when rents increase faster than home prices or when home prices weaken relative to rents.
A lower ratio means that home prices are relatively less elevated compared with rents. This may reflect stronger rental demand, slower home-price growth, tighter mortgage conditions, higher borrowing costs, or weaker demand for home purchases.
The model does not compare the dollar purchase price of an average home with the annual rent for the same property. The home-price input and rent input are both national indices, so the absolute ratio level should not be interpreted as the number of years of rent required to purchase a home.
The chart compares the Home-Prices-to-Rent Ratio with its arithmetic historical average.
A reading above the historical average means that home prices are relatively elevated compared with rents versus the full historical sample.
A reading below the historical average means that rents are relatively elevated compared with home prices.
The deviation line expresses how far the current ratio is above or below its historical average as a percentage.
A deviation of 0% means that the ratio is equal to its historical average.
A positive deviation means that home prices are relatively stronger than rents compared with the historical average.
A negative deviation means that rents are relatively stronger than home prices compared with the historical average.
The standard-deviation zones show whether the current relationship is relatively common or historically unusual. Values farther from 0% represent less common historical relationships between U.S. home prices and residential rents.
The model can provide useful context about the relative movement of housing purchase prices and rents. However, it is not a complete measure of whether buying or renting is financially preferable.
Limitations
- Both inputs are indices rather than directly comparable dollar housing costs, so the ratio is a relative measure rather than a literal price-to-rent multiple for a specific property.
- The national home-price and rent indices can conceal substantial differences across regions, cities, property types, and local housing markets.
- Rent indices may adjust more slowly than home prices because leases reset gradually and measurement methods differ from those used for property prices.
- The model does not include mortgage rates, taxes, maintenance, insurance, transaction costs, or other expenses that affect the economics of owning versus renting.
- The historical average, trend, and standard-deviation zones depend on the selected sample period and model specification.
- Structural changes in housing supply, financing conditions, regulation, demographics, and rental-market composition may alter the relationship over time.
- An unusually high or low reading can persist and should not be interpreted as a complete affordability measure, a precise valuation estimate, or a market-timing signal.
Methodology
The Home-Prices-to-Rent Ratio is calculated by dividing the monthly U.S. home-price index by the monthly rent index.
The model calculates the arithmetic historical average of the full monthly Home-Prices-to-Rent Ratio series. The percentage deviation measures how far the current ratio is above or below that historical average. The standard deviation of the percentage-deviation series is used to create the ±1σ, ±2σ and ±3σ zones around 0%. The z-score standardizes the current deviation relative to the historical variation in the percentage-deviation series. Both the home-price input and the rent input are indices, not dollar amounts. The model uses monthly observations beginning in January 1981.
Data sources
Monthly U.S. home-price index
Range: January 1981 to the latest available observation
Source: Robert J. Shiller, U.S. Home Prices historical data; https://shillerdata.com/
Consumer Price Index for All Urban Consumers: Rent of Primary Residence in U.S. City Average, seasonally adjusted
Range: January 1981 to the latest available observation
Source: U.S. Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers: Rent of Primary Residence in U.S. City Average [CUSR0000SEHA], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/CUSR0000SEHA