Ratio Of Home Prices To Rents Now Below Trend

More evidence from the Economist that the US housing market has now undershot on the downside:

That’s not to say that we’re primed for a return to boomtime levels of employment in the construction industry. But it’s strange that we continue to be at bust levels of mass unemployment in construction. The problem, again, is that household formation has fallen way below the population growth trend since lots of people don’t have jobs or are heavily indebted. People seem to be doubling up, and we’re not building new homes even though supply has gotten tight.