Home prices plummeted during the housing crash, but rents did not. Renters signing a lease at the end of the second quarter paid 29.5 percent of their income to rent, compared with 24.9 percent in the pre-bubble period, according to Zillow. Rents are now less affordable than historical norms in 88 out of the nation's 100 largest housing markets.
Existing home sales rose in July from June, according to a report Thursday from the National Association of Realtors, but the NAR's chief economist, Lawrence Yun, expressed concern over rising rents. He noted that rents have been up 4 percent on an annualized basis for the past four months and suggested the consumer price index "could surprise to the upside" because of that. A higher CPI signals inflation, which is a trigger for the Federal Reserve to raise interest rates.
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Low mortgage rates have not helped fuel more mortgage applications to buy a home. Those are down 11 percent from a year ago, according to the Mortgage Bankers Association. Credit has eased slightly in the past few months, and that could help some going into fall. The share of first-time homebuyers in July, usually mortgage-dependent buyers, did rise from 28 percent in June to 29 percent, but it is still well below the historical norm of around 40 percent.
"Lower prices, a slight easing of credit standards, a better pace of job hiring and more inventory on the market helped to lift [home] sales, but I still can't reconcile why mortgage applications to buy a home, according to the MBA, is still plumbing six-month lows," noted Peter Boockvar, chief market analyst of The Lindsey Group. "I think it still points to a market whose recovery remains uneven."
—By CNBC's Diana Olick