Rent-Price Ratio

These quarterly data, starting in 1960, provide the average ratio of estimated annual rents to house prices for the aggregate stock of housing in the United States. The rental data are gross and do not account for income taxes or depreciation.

In brief, the data are constructed as follows.  First, using micro data from each of the 1960, 1970, 1980, 1990, and 2000 Decennial Census of Housing, annual rents paid for rentals units are used to estimate annual rents for owner-occupied units. In each of these years, the average of these estimated rents is divided by the average (self-reported) value of the owner-occupied housing units.  This gives five benchmark rent-price ratios, one for each decennial year.  Rent and price indexes are used to interpolate between these benchmark years and to extrapolate beyond 2000.

The data set is available here. The contents of the Microsoft Excel spread sheet tabs are as follows:

• Rent-price graph: This chart graphs the ratio of the annual rent to price by quarter, starting in 1960:1. After 2000, the red line shows the rent-price ratio when house prices are extrapolated using the Federal Housing Finance Agency (FHFA)—formerly Office of Federal Housing Enterprise Oversight (OFHEO)—"purchase-only" price index. The blue line shows the path of the ratio when house prices are extrapolated using the Macromarkets LLC national house price index (formerly Case-Shiller-Weiss).
• Rent-price data: This excel spreadsheet shows quarterly estimates of the average annual imputed rent accruing to owner-occupied households and the average value of housing for the owner-occupied stock of housing.
• Bureau of Labor Statistics (BLS), Case-Shiller-Weiss (CSW), OFHEO index data and BLS worksheet: These sheets contain the underlying rent and price indexes used to interpolate and extrapolate the rent and price data.

Use of data in a paper should include the following citation: Davis, Morris A., Lehnert, Andreas, and Robert F. Martin, 2008, "The Rent-Price Ratio for the Aggregate Stock of Owner-Occupied Housing," Review of Income and Wealth, vol. 54 (2), p. 279-284; data located at Land and Property Values in the U.S., Lincoln Institute of Land Policy http://www.lincolninst.edu/resources/