well, it's generally the association between buying a house and renting a house. When prices climb really high, the potential buyer is better off renting the house in most cases.
Renting cost = rent - potential interest/returns on the downpayment money
Buying cost = payment, taxes, insurance, mantinence + potential interest/returns on downpayment money - appreciation - money saved on tax incentives (interest on payment)
these are general formulas to compare the two, and what was happening is the purchase price/value was getting so high affecting the payment but the rent was not increasing.....in a perfect economic world, I guess these two should be somewhat close to each other or raise at the same rate
so, part of the "formula" for rental prices is that they need to be below the buying cost to draw people in....the other part involves people who don't have the downpayment to buy. This was not an issue with 100% loans or whatever in recent years. That created a huge amount of people buying, raising the demand of housing. People who SHOULD have been renting skipped over to the buying side in huge numbers. Now, these same people are jumping back to the rent side while causing less demand on buying houses.
IMO, the rent cost will increase and the buying cost will decrease until they get somewhat close and then we will see what the next cycle is! lol
News 
Market Data 
Discover 
