Unfortunately, the opening paragraph uses rents as a proxy for house prices. As we know, the two can diverge widely even in the medium term. For instance, monthly rents historically used to be a little under 1% of a property’s market value. At the peak of the housing boom in 2005, however, in places like coastal So. Cal., monthly rents were less than one third of 1% of the property value!
The article’s author had no better choice, as house pricing data is hard to come by. Professor Shiller does have a chart with house prices going back to the 1890s, which shows that in the long run, the stock market is a far better investment.
