House Prices and Rents

40 Pages Posted: 9 Nov 2020

See all articles by Eugene F. Fama

Eugene F. Fama

University of Chicago - Finance

Kenneth R. French

Dartmouth College - Tuck School of Business; National Bureau of Economic Research (NBER)

Date Written: November 3, 2020


Monthly cross-section regressions show that price-to-rent ratios and lagged growth rates of house prices for eleven U.S. metro areas predict variation in the cross-section of rent growth rates. Details of the interplay between house prices and rents pose open questions. What generates the 1998-2012 boom and bust in house prices relative to rents and the subsequent 2012-2020 surge in prices and rents? Why are similar wide swings in house prices relative to rents absent for at least 45 years prior to 1998? General patterns in house prices and rents are shared by many metropolitan areas, but there are large differences of degree, and some areas pass entirely on the boom and bust in 1998-2012 house prices. What explains this diversity?

Suggested Citation

Fama, Eugene F. and French, Kenneth R., House Prices and Rents (November 3, 2020). Chicago Booth Research Paper No. 20-48, Fama-Miller Working Paper, Available at SSRN: or

Eugene F. Fama (Contact Author)

University of Chicago - Finance ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-7282 (Phone)
773-702-9937 (Fax)

Kenneth R. French

Dartmouth College - Tuck School of Business ( email )

Hanover, NH 03755
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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