Final answer:
When home prices fall, the rent ratio tends to decrease, making renting relatively more expensive compared to buying. However, the rent ratio can vary by region and market conditions.
Step-by-step explanation:
The rent ratio is a measure of the affordability of housing, calculated by dividing the median home price by the annual rent. When home prices fall, the rent ratio tends to decrease. This means that rent becomes relatively more expensive compared to buying a home. For example, if the rent ratio is 20, it means that it would take 20 years of paying rent to equal the cost of buying a home.
In recent years, as home prices have fallen, the rent ratio has likely decreased, making renting relatively more expensive compared to buying. However, it's important to note that the rent ratio can vary by region and market conditions.