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The Word from on High: Rent!

An fresh take on the rent vs. buy question in this week's Economist. In case you are among the unwashed who don't subscribe to The Economist, we will summarize the points we found most interesting as we studied them in the magazine (okay, as we scanned them in the cut-and-paste email a reader sent us):

·In America, Britain, Spain New Zealand and Australia, average net rental yields (allowing for management fees, maintenance and empty periods) have fallen to 3.5% or less, well below mortgage rates.
· America's ratio of prices to rents is 32% above its average level during 1975-2000.
· If rents continue to rise at their current annual pace of 2.5%, house prices would need to remain flat for over ten years to bring America's ratio of house prices to rents back to its long-term norm.
The Economist's conclusion ? rent! ? comes with a caveat: "Be warned, if you make such a bold claim at a dinner party, you will immediately be set upon." Our suggestion: Explain proudly and loudly that you read it in The Economist, and you will be showered with kisses.
· Still Want to Buy? [The Economist?sub. req'd]
· To Buy or Not to Buy [The Economist]
· 2000 vs 2005 Part 5: 'Totally Insane' [Curbed]