During the housing bubble, as home prices roared, buying became relatively expensive in comparison to renting. Of course, a lot has changed since then. Prices have collapsed. They continue to fall, which should make buying more affordable for some renters. At what point will renting no longer look like the better option? We're not far from that equilibrium.

In fact, David Blitzer, Chairman of Standard and Poor's Index Committee, explains that the rent-to-buy ratio is approaching its 24-year average. Here's his chart:

That average is 89.5, represented by the thick black line. Since the ratio is near its equilibrium, does this mean that home prices' may begin to rise again soon?

Not necessarily. We have no reason to believe that the ratio can't rise well above the historical average. After all, it was well above the black line in the early- to mid-1990s. So it depends on other factors.

One is the general sentiment towards homeownership. As long as Americans are worried about stability, buying will continue to suffer. That stability should be defined broadly. The housing market needs to stabilize. But the broader economy also needs to heal. If Americans are unemployed, underemployed, or fear layoff, then they aren't likely to buy a home.