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Housing is included in CPI. Housing is included as rent, and owner-adjusted rent (what rent would be if a house was rented). Housing purchase prices aren’t inc
by alexmingoia 6y ago
Housing is included in CPI. Housing is included as rent, and owner-adjusted rent (what rent would be if a house was rented).
Housing purchase prices aren’t included because a house isn’t consumed within a year. The price of a house represents both current and future housing consumption. It’s not some conspiracy to hide inflation.
- francisofascii 6y agoSure, it is included, but underrepresented. When people with six figure salaries are paying 30-50% of their income on rent, the rent figure should be the primary driver of the CPI.
- alexmingoia 6y agoUnderrepresented how? The percentage of income paid towards rent isn’t a measure of a change in rental cost. In other words, prices can change at a different rate than the percentage of income paid to rent.
- jlmorton 6y agoCPI is calculated nationally. The San Francisco, Los Angeles, Seattle, Washington DC-Baltimore, New York and Boston markets are not the only places in the United States. There are lots of places in this country where you can get a 1 bedroom apartment for $500/month, or a 2,000 square foot house for $100k. Meanwhile, wage growth in these high-cost coastal markets has kept pace with the housing cost increases, which is part and parcel with housing cost growths in these regions. There's no doubt that there's been significant housing inflation in this country, but someone in Chicago making six figures is not paying 50% of their income on rent.