U.S. study shows rents rose less during boom

A study by Federal Reserve economists shows
that housing prices “likely would have to fall considerably” — 15
percent over five years — and rents would have to rise 4 percent per
year before they reach their historical equilibrium. Since 1960, annual
rents fluctuated at around 5 percent to 5.25 percent of home prices
until 1995. By 2006, the annual rent/price ratio down to 3.48 percent,
after housing prices had more than doubled to an average of $282,000,
while the average rent had risen 48 percent to $818.