http://www.housingviews.com/2012/09/28/rent-to-buy-and-home-prices-to-income/buy-rent-7-2012/” src=”http://www.housingviews.com/wp-content/uploads/2012/09/buy-rent-7-2012-420×324.jpg” alt=”” width=”420″ height=”324″ />source: S&P/Case-Shiller Home Price Indices and Bureau of Labor Statistics
http://www.housingviews.com/2012/09/28/rent-to-buy-and-home-prices-to-income/price-dpi-2/” src=”http://www.housingviews.com/wp-content/uploads/2012/09/Price-DPI-420×296.jpg” alt=”” width=”470″ height=”313″ />
Both charts use the S&P/Case-Shiller 10-City Composite Index because it has history back to 1987; the 20-City begins in 2000. The income measures is disposable personal income per capita. This is income after taxes and is divided by the population so the comparison is between the price of a home and an individual’s income. There is no impact from population increases since 1987. The rent-to-buy comparison uses the Consumer Price Index for the rent of a primary residence to measure the cost of renting. Both measures are scaled to average 100 over the time period.