House price to rent ratio index in the U.S. 2015-2023, per quarter
The house price to rent ratio index in the U.S. declined in the second half of 2022, indicating that house price growth slowed down compared to rental growth. That was the first decrease after a long period of a steady increase. House prices increased dramatically since the coronavirus pandemic. Meanwhile, rents have grown notably, but at a slower rate.
What does the house price to rent ratio index measure?
The house-price-to-rent-ratio measures the evolution of house prices compared to rents. It is calculated by dividing the median house price by the median annual rent. In this statistic, the values have been normalized with 100 equaling the 2015 ratio. Consequentially, a value under 100 means that rental rates have risen more than house prices. Compared to the OECD countries average, the gap between house prices and rents in the United States was wider.
The house price to rent ratio in different countries
The house price to rent ratio in the United Kingdom continued to increase in the second half of 2022, but growth softened, as the housing market cooled. On the other hand, the index in Germany fell drastically between the second quarter of 2022 and the second quarter of 2023. A similar trend was observed in France.
