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According to the article, $1 in housing in 1999 is equivalent to $1.86 today. That's... incredibly hard to believe. The Case Shiller is up over 300% for the sam

According to the article, $1 in housing in 1999 is equivalent to $1.86 today. That's... incredibly hard to believe. The Case Shiller is up over 300% for the same time period. And $1 in food is $1.84 today? I don't have an index to reference, but also hard to believe.

kfarr 3y ago
I think they are saying you’d need $1.86 of today’s money spent on housing to be equivalent to $1 spent on housing in 99?
- quirino 3y ago
  I think the parent commenter understands this part, they're just saying they think the values are actually much higher
- cstejerean 3y ago
  That's the hard to believe part, it would imply housing costs on average are only up by 86%, but that doesn't seem to be anywhere near accurate in at least large parts of the country (all the ones I looked at least when we considered moving).
  - ls612 3y ago
    Not everywhere has had the same housing problems SF and NYC have had.
    - quickthrower2 3y ago
      That there exists a cheap house in a rural area doesn’t help most people who need a job. For them inflation is higher.
      - ls612 3y ago
        Plenty of non-NYC/SF major metro areas (>1mm people) with far lower housing inflation than those cities. No need to be rural.
      - eloisant 3y ago
        This is true, but the question is not whether it helps or not but if the 86% increase is the right number or not. Yes inflation was higher in big cities.
    - xboxnolifes 3y ago
      Far more than SF and NYC have had housing prices more than double over the last 20 years. Hell, doubling over that timeframe would barely be over 3% inflation.
- paulpauper 3y ago
  but maybe this is true if you factor in cheaper mortgages, lower rates . financing options were worse in 1999 vs 2019. Homes were very cheap in 1970 but way harder to get a good mortgage, too. much more was paid upfront.
  - quickthrower2 3y ago
    this is the boomer retort. something Kirsty Allsopp might say for example. But: would you rather buy say a car for $100k interest free or $10k at 10% interest?
gtowey 3y ago
Agreed. Everything is at least a solid 30% more expensive than just 2020. Food has gotten insanely expensive in that time. Anecdotally, I can remember a burger at a restaurant was about $6 in 1999. Now average seems to be 15 to 20. I would believe that everything is about 3x the price from 20 years ago. This chart seems to say the average is less than 2x which I don't agree with.
- smelendez 3y ago
  Restaurant and packaged food (e.g., cookies, frozen meals) prices up an average 30% since 2020 is what I usually think too, but I also think bargains have disappeared, which is probably harder to capture. It feels like far fewer restaurants have lunch specials than in 2020, for instance, and a lot of cheap restaurants have either raised prices to the norm or closed. Bars and casinos having discounted or free food to get you to drink has gone out the window (even where legal). And looking back 20 years, it feels like far fewer restaurants have small and simple orders available. For instance, you used to be able to go into a diner or other casual restaurant and get a hamburger or other sandwich with no fries or side. That’s harder to find now. So is cheap, unremarkable coffee and cheap breakfast items, like small pastries or two-egg plates. Similarly, it’s harder to find a small car, a house or apartment without central air, a 15 inch TV (though TVs have gotten cheaper), etc.
  - paulpauper 3y ago
    yeah, people are being forced to buy features or addons, which adds to the cost. this is another way to pass on inflation to the consumer marketed as a 'good deal', when it isn't. instead of an economical small car, you have to buy a bigger car which gets worse mileage and full of unwanted stuff.
  - jclardy 3y ago
    Yeah - I distinctly remember back in 2006-2007 (My early college days) getting a 2 for $2 deal at McDonalds - 2 bacon, egg and cheese biscuits for $2. Now one biscuit (normally) is $3.89 and they run 2 for $5 specials, but seemingly way less often. Back in the day, the special was ran literally all the time, but even still the cost of the biscuit was under $2. And this is 7 years past 1999. The Big Mac Index shows the price of a big mac in 2000 at $2.24, and now at $5.58, so that would put $1 in 2000 at $2.49 in 2020 which feels a lot closer to the actual number...but still low because everything "around" the entree has also increased similarly, if not more.
gjsman-1000 3y ago
The graph is referencing the Consumer Price Index. I think that the official inflation numbers given are low to the point of absurdity. Time to dust off criticisms of the CPI... Most likely, no doubt, there's some political deflation of the numbers.
kleton 3y ago
CPI allows substitutions. So where the basket in 1999 included beef, now it probably only includes chicken.
- gjsman-1000 3y ago
  Does it allow substitutions for country of origin? What if it was primarily US-made goods, but now reflects lower-cost imports?
- pton_xd 3y ago
  And, according to the article "the CPI does not directly measure the prices of investments like stocks or the purchase price of homes." So they have a category called "Housing" which presumably does not include the price of a home. Very informative and helpful infographic.
  - snapplebobapple 3y ago
    Its owners equivalent rent i believe, which makes sense academically but not practically. When you are using it to gauge whether your monetary policy is causing inflation you should be looking at asset prices at least as hard as consumable prices and you shiuld be extremely wary doing substitutions.
  - s1artibartfast 3y ago
    It counts the cost of rent. If you buy a house for far more than the value of rent, you are making a speculative investment. Rent is half my mortgage for an equivalent house. It wouldn't be realistic to call my mortgage the cost of shelter.
    - medvezhenok 3y ago
      I think that’s actually the big problem with the CPI - it treats a house purchase as a speculative investment, rather than a separate category of housing on equal footing with rent. I think the median housing payment (mortgage + interest) should be included in the CPI. As someone who is looking to start a family, renting vs owning is not simply a financial question, they are totally different goods which are not interchangeable
armchairhacker 3y ago
These "price comparisons" really need to be divided into specific categories. $1 from 1999 would be worth a lot more for buying a house, since house prices have gone up insane. $1 from 1999 would be worth much less for technology: a modern-day phone would be essentially priceless, but if you only care about specs, it could be replicated in a supercomputer, albeit for >$100 million (https://news.ycombinator.com/item?id=21977330 https://news.ycombinator.com/item?id=21977330) Even within a category it depends: certain food items (junk food) seem to have gone up in price considerably more than others.
- fooker 3y ago
  >These "price comparisons" really need to be divided into specific categories. Not it doesn't. This is the primary difference between liquid and non-liquid assets.
- CapricornNoble 3y ago
  I saw a YT vid that referenced a research paper that used a particular basket of goods to define the quality of life for a peasant in the Roman Empire. I think the trick is to build your personal consumption basket for essential unchanging goods and use that for comparison. Certain things like the types of food I eat have been reasonably consistent over the past 20 years. So something like "how many calories & grams of protein could I buy in 2003 vs 2023", and then compare that my hypothetical wage growth over that timeframe. Or wow much is a quart of oil? I needed to do oil changes 20 years ago, and still do my own today, etc...
- nickjj 3y ago
  > $1 from 1999 would be worth much less for technology This is expected given technology is advancing but pricing hasn't changed much if you factor in relative costs to relative performance / outcomes. For example in 1999-2000 you could have gotten a really solid machine capable of playing Quake 3 (the latest and greatest FPS game of that time) getting a rock solid 125 fps on a CRT monitor capable of doing 120hz for around $650-700. Realistically a solid machine nowadays with a mid-grade GPU is likely going to run you $1,000 to $1,200 and that could easily be more if you wanted a higher end GPU. All in all you're talking about a little under double the price which is roughly what an inflation calculator says (1.85x) for the same relative outcome.
4death4 3y ago
Real estate prices are only indirectly included in CPI via owner-equivalent rent. Really, CPI is a joke for measuring broad inflation. It measures a specific basket of goods. Treating that basket of goods as the true value of the dollar is absurd.
- userinanother 3y ago
  CPI is ok for specific categories but the basket weighting is absolutely trash. That being said somehow healthcare indexing got messed up and it was down significantly which is silly because healthcare never goes down
  - em500 3y ago
    This is the current basket weighting: https://www.bls.gov/cpi/tables/relative-importance/2022.htm https://www.bls.gov/cpi/tables/relative-importance/2022.htm Which should be changed, under the constraint that they must sum to 100?
    - userinanother 3y ago
      Medical care should be weighted at 20-30% to reflect how much of a burden it’s become. Childcare is severely underweighted as well. Housing is underweighted in rents and overweighted in owner equivalent rent. Those are just the obvious ones
      - sokoloff 3y ago
        > Childcare is severely underweighted as well. Childcare is the average amount spent by all households, not only by the households which have childcare expenses. I spent essentially $0 on childcare now that my kids are old enough to stay home alone if my spouse and I go out. I expect to continue to spend $0 for the next 3-4 decades. > Housing is underweighted in rents and overweighted in owner equivalent rent. About 2/3 of Americans "own" their home. The owner-equivalent rent also happens to be about 2/3 the sum of (owner equivalent rent plus rent). That is not an accident, but rather is causally linked.
paxys 3y ago
USA is a big country. Yes housing has gone up a lot more in NYC and SF, but those numbers are offset by random farm towns in North Dakota and Iowa.
- asynchronous 3y ago
  Show me anywhere, in the entire US, that has gone down in pricing for housing over the last three years.
  - paxys 3y ago
    Who is saying anything about prices going down?
  - serf 3y ago
    that doesn't seem that hard to find.[0] plenty of regions have fallen, it just isn't a consistent decline in most cases. [0]:https://smartasset.com/data-studies/where-home-prices-fell-2023 https://smartasset.com/data-studies/where-home-prices-fell-2...
  - s1artibartfast 3y ago
    It doesn't have to go down to support an 85% average increase. An equal number at 50% in the Midwest cancels 110% increase in sf.
  - lotsofpulp 3y ago
    Pretty much all of western US (and I expect 90% of the rest of the US) homes have declined in previous 18 months.
- dkasper 3y ago
  Guessing you’ve never looked at housing in random farm towns? They all mooned in 2021 too except the really crappy ones.
  - paxys 3y ago
    Home values have gone up on paper due to real estate speculation, which CPI doesn't care about. It instead measures how much you would need to pay to rent an equivalent apartment year over year.
refurb 3y ago
https://fred.stlouisfed.org/series/CSUSHPINSA https://fred.stlouisfed.org/series/CSUSHPINSA Case-Shiller is up ~220%
pcurve 3y ago
It’s doing one to one comparison of the comparable homes. Schiller looks at average home price without adjusting for newer homes being much larger and better furnished than the ones built 25 years ago
deleted 3y ago
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light_hue_1 3y ago
Oh, you're assuming that CPI is computed in a rational scientific way. And that "housing" means housing. Neither is true. Let's take a deep dive into how CPI housing is computed. You would think it could just be "track the price of every home sale in the US", or "track the price of every new rental". Ah, my naive friend, the US Bureau of Labor Statistics lives in the year 1900 as if data, electricity, compute, and statistics don't exist. Anyway, those numbers would be too scary and too objective. First, the real kicker, CPI housing doesn't measure the cost of a house! At all. Their rationale is that the a house is an investment. So it has no relationship to the Case-Shiller index at all. What do you measure if you don't measure the cost of housing? Well, you're left measuring rents, but that's not satisfying when a lot of people buy a home. So.. why don't we measure the imaginary rent that someone thinks that their house that they bought 30 years ago might be able to fetch. 3/4ths of the housing index is computed from a single quantity called the "Owners’ equivalent rent of residences". They ask people in a survey: “If someone were to rent your home today, how much do you think it would rent for monthly, unfurnished and without utilities?” Let that sink in for a moment. People who aren't renting their home. Who aren't real estate agents. Who have no idea what the cost to rent their home is. Who are homeowners and haven't rented a home in decades probably. "Bob, what do you think this would rent for?" "Ugh, $1400/month" Great! Let's base our entire understanding of the economy on the random answers of clueless people. But, remember, the Bureau of Labor Statistics needs to do everything like we're in the pre-electricity era cruising around on the latest model of horse. So they can't ask too many people. Only a few thousand people, and they keep asking the same people over and over again. Seriously, they ask the same few thousand people every 6 months what their rent is and what their imaginary rent is. They even admit this doesn't change much. And they admit this means all the data they get is garbage, it's too skewed by the particular properties of those few thousand people they randomly selected once. They could just ask 100,000 people or at least pick a different group of a few thousand every time? And then everything averages out eventually. Doing that with your horse and buggy is way too hard. Instead they adjust the junk responses they get for the type of housing, quality, etc. With a whole bunch of magic numbers that come from yet another survey of clueless people, the Department of Energy’s Residential Energy Consumption Survey, which was last run in 2020 (although I think housing CPI is computed with the 2015 run) and asked about 5000 households a bunch of questions + got some billing info from their utilities. They compute monthly CPI with an amazing formula that I think is the only use of a 6th degree square root I've ever seen in statistics (and I have CS/math degrees and do ML research; it's probably legit, but I'm not working backwards to figure out how they derived this). Oh, we're done yet! Housing also gets older all the time, we need to correct for this. That's a whole pdf. That I've never read. And I'm not sacrificing my sanity for HN. https://www.bls.gov/cpi/quality-adjustment/updating-housing-age-bias.pdf https://www.bls.gov/cpi/quality-adjustment/updating-housing-... But it has a model from January 1997 with 110 degrees of freedom. That's not confidence inspiring to say the least. Ok, so we ask clueless people to give us meaningless numbers that we then adjust based on complex largely meaningless formulas to compute an imaginary rent that doesn't exist instead of just looking at the actual cost of housing. How could this get worse? With the magic of "imputation"! A beautiful word from statistics that means "Oh, we didn't collect enough data and we have no idea what the actual number should be, so we're just going to make a number up and pretend like it's a data point we gathered based on some idea of what we think it ought to have been". Because the best data is the data you make up according to your gut. Feel free to read the horror show for yourself https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-and-rent.htm https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-an... No one with two neurons to rub together would ever adopt this methodology in the modern world. Of course none of these numbers match any of the reality that anyone experiences. Their documentation on how anything is computed reads like standup comedy.
HumblyTossed 3y ago
We plan out meals and so we have dozens of recipes that we rotate through. Keeps things not quite boring while also keeping everything in the minds of everyone in the family so that when we ask what everyone wants for suppers this week they can think of something. Anyway, this is all to say that our grocery habits are fairly consistent. Our bill is up, in the past two years alone, between 30 and 40 percent. I haven't gone back to the old receipts to confirm exactly, but looking back at some old statements confirms that range. That's just two years. Not 24.
- creer 3y ago
  It feels like "covid" and "supply chain issues" were a great excuse to wildly reshuffle prices, item availability, item quality and packaging quantity. ... And yet it doesn't seem visible in corporate profits. It's not very visible where that price difference is going. So I don't know yet. I'm open to useful data (which the current CPIs really are not.) By this I mean, corporate profits have increased but are still most often (never mind Apple) a small fraction of price in the retail world.
  - HumblyTossed 3y ago
    > packaging quantity. Ha! Yeah, I've seen some 11oz(!!!) bags of coffee recently.
mistrial9 3y ago
it is appropriate here to question these numbers carefully -- and, this fits very well to lived experience over 25 years in a place with very high rate of change.. one might say an epicenter of these changes.. the SF Bay Area in California.. from what I read, Los Angeles metro is very similar... Seattle also.. these places I know well and these numbers are real from the ground view.
wuliwong 3y ago
I wanted to comment with a similar sentiment, particularly about housing. I think the Case Shiller index is a solid reference. My own anecdotal experienced had me buying a house and selling it 2.5 years later (in 2022) for 72% more than what I paid for it.
burritofanatic 3y ago
Agreed. I remember in 2000 that I used to be able to buy the cheapest full meal with sides at a fast casual for under $4. Now maybe it under $12!
rossdavidh 3y ago
Not that this explains all of the discrepancy between official statistics and what we see in reality, but the average size home has gone up over time, so if you're looking at price per square foot instead of price per home it would account for some of that. The increase in average home size is especially striking given that the average family size is declining.
francisofascii 3y ago
I think many areas saw a significant fall in prices in the 2009 crash, but some hot areas didn't. Those hot areas are probably 3 times as high compared to 1999, but the areas that were more normal might be closer to 1.86. Sample of one. The house I once lived in sold for $193K in 1999, I sold it for $300K in 2007 (before the housing crash), it's Zillow estimate fell to $230K in 2010. Today the Zillow estimate is $454K. So that is 2.3 the cost.
darth_avocado 3y ago
Housing prices have 2X in just last 5 years, and in some markets more. Food is definitely way more expensive. Raw foods like Beef, eggs, flour, sugar etc. all has gone up 60-80% in the last two years. So I definitely believe you when you say it is hard to believe.
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dragonwriter 3y ago
> According to the article, $1 in housing in 1999 is equivalent to $1.86 today. That's... incredibly hard to believe. The Case Shiller is up over 300% for the same time period. Case-Shiller is index of homes-as-an-asset buy prices, the housing component of CPI is housing-as-a-consumed-service rent prices. 1999 was pretty near historical lows for the buy:rent price ratio, today is just off the all-time high, so, yes, now:1999 for buying a home as an asset is very different than now:1999 for consuming housing as a service.
jjav 3y ago
> And $1 in food is $1.84 today? I don't have an index to reference, but also hard to believe. Up until 1999/2000, a Burger King Whopper was $1. Today ~$8

kfarr 3y ago

I think they are saying you’d need $1.86 of today’s money spent on housing to be equivalent to $1 spent on housing in 99?

quirino 3y ago
I think the parent commenter understands this part, they're just saying they think the values are actually much higher
cstejerean 3y ago
That's the hard to believe part, it would imply housing costs on average are only up by 86%, but that doesn't seem to be anywhere near accurate in at least large parts of the country (all the ones I looked at least when we considered moving).
- ls612 3y ago
  Not everywhere has had the same housing problems SF and NYC have had.
  - quickthrower2 3y ago
    That there exists a cheap house in a rural area doesn’t help most people who need a job. For them inflation is higher.
    - ls612 3y ago
      Plenty of non-NYC/SF major metro areas (>1mm people) with far lower housing inflation than those cities. No need to be rural.
    - eloisant 3y ago
      This is true, but the question is not whether it helps or not but if the 86% increase is the right number or not. Yes inflation was higher in big cities.
  - xboxnolifes 3y ago
    Far more than SF and NYC have had housing prices more than double over the last 20 years. Hell, doubling over that timeframe would barely be over 3% inflation.
paulpauper 3y ago
but maybe this is true if you factor in cheaper mortgages, lower rates . financing options were worse in 1999 vs 2019. Homes were very cheap in 1970 but way harder to get a good mortgage, too. much more was paid upfront.
- quickthrower2 3y ago
  this is the boomer retort. something Kirsty Allsopp might say for example. But: would you rather buy say a car for $100k interest free or $10k at 10% interest?

gtowey 3y ago

Agreed. Everything is at least a solid 30% more expensive than just 2020. Food has gotten insanely expensive in that time. Anecdotally, I can remember a burger at a restaurant was about $6 in 1999. Now average seems to be 15 to 20. I would believe that everything is about 3x the price from 20 years ago. This chart seems to say the average is less than 2x which I don't agree with.

smelendez 3y ago
Restaurant and packaged food (e.g., cookies, frozen meals) prices up an average 30% since 2020 is what I usually think too, but I also think bargains have disappeared, which is probably harder to capture. It feels like far fewer restaurants have lunch specials than in 2020, for instance, and a lot of cheap restaurants have either raised prices to the norm or closed. Bars and casinos having discounted or free food to get you to drink has gone out the window (even where legal). And looking back 20 years, it feels like far fewer restaurants have small and simple orders available. For instance, you used to be able to go into a diner or other casual restaurant and get a hamburger or other sandwich with no fries or side. That’s harder to find now. So is cheap, unremarkable coffee and cheap breakfast items, like small pastries or two-egg plates. Similarly, it’s harder to find a small car, a house or apartment without central air, a 15 inch TV (though TVs have gotten cheaper), etc.
- paulpauper 3y ago
  yeah, people are being forced to buy features or addons, which adds to the cost. this is another way to pass on inflation to the consumer marketed as a 'good deal', when it isn't. instead of an economical small car, you have to buy a bigger car which gets worse mileage and full of unwanted stuff.
- jclardy 3y ago
  Yeah - I distinctly remember back in 2006-2007 (My early college days) getting a 2 for $2 deal at McDonalds - 2 bacon, egg and cheese biscuits for $2. Now one biscuit (normally) is $3.89 and they run 2 for $5 specials, but seemingly way less often. Back in the day, the special was ran literally all the time, but even still the cost of the biscuit was under $2. And this is 7 years past 1999. The Big Mac Index shows the price of a big mac in 2000 at $2.24, and now at $5.58, so that would put $1 in 2000 at $2.49 in 2020 which feels a lot closer to the actual number...but still low because everything "around" the entree has also increased similarly, if not more.

gjsman-1000 3y ago

The graph is referencing the Consumer Price Index. I think that the official inflation numbers given are low to the point of absurdity. Time to dust off criticisms of the CPI... Most likely, no doubt, there's some political deflation of the numbers.

kleton 3y ago

CPI allows substitutions. So where the basket in 1999 included beef, now it probably only includes chicken.

gjsman-1000 3y ago
Does it allow substitutions for country of origin? What if it was primarily US-made goods, but now reflects lower-cost imports?
pton_xd 3y ago
And, according to the article "the CPI does not directly measure the prices of investments like stocks or the purchase price of homes." So they have a category called "Housing" which presumably does not include the price of a home. Very informative and helpful infographic.
- snapplebobapple 3y ago
  Its owners equivalent rent i believe, which makes sense academically but not practically. When you are using it to gauge whether your monetary policy is causing inflation you should be looking at asset prices at least as hard as consumable prices and you shiuld be extremely wary doing substitutions.
- s1artibartfast 3y ago
  It counts the cost of rent. If you buy a house for far more than the value of rent, you are making a speculative investment. Rent is half my mortgage for an equivalent house. It wouldn't be realistic to call my mortgage the cost of shelter.
  - medvezhenok 3y ago
    I think that’s actually the big problem with the CPI - it treats a house purchase as a speculative investment, rather than a separate category of housing on equal footing with rent. I think the median housing payment (mortgage + interest) should be included in the CPI. As someone who is looking to start a family, renting vs owning is not simply a financial question, they are totally different goods which are not interchangeable

armchairhacker 3y ago

These "price comparisons" really need to be divided into specific categories. $1 from 1999 would be worth a lot more for buying a house, since house prices have gone up insane. $1 from 1999 would be worth much less for technology: a modern-day phone would be essentially priceless, but if you only care about specs, it could be replicated in a supercomputer, albeit for >$100 million (https://news.ycombinator.com/item?id=21977330 https://news.ycombinator.com/item?id=21977330) Even within a category it depends: certain food items (junk food) seem to have gone up in price considerably more than others.

fooker 3y ago
>These "price comparisons" really need to be divided into specific categories. Not it doesn't. This is the primary difference between liquid and non-liquid assets.
CapricornNoble 3y ago
I saw a YT vid that referenced a research paper that used a particular basket of goods to define the quality of life for a peasant in the Roman Empire. I think the trick is to build your personal consumption basket for essential unchanging goods and use that for comparison. Certain things like the types of food I eat have been reasonably consistent over the past 20 years. So something like "how many calories & grams of protein could I buy in 2003 vs 2023", and then compare that my hypothetical wage growth over that timeframe. Or wow much is a quart of oil? I needed to do oil changes 20 years ago, and still do my own today, etc...
nickjj 3y ago
> $1 from 1999 would be worth much less for technology This is expected given technology is advancing but pricing hasn't changed much if you factor in relative costs to relative performance / outcomes. For example in 1999-2000 you could have gotten a really solid machine capable of playing Quake 3 (the latest and greatest FPS game of that time) getting a rock solid 125 fps on a CRT monitor capable of doing 120hz for around $650-700. Realistically a solid machine nowadays with a mid-grade GPU is likely going to run you $1,000 to $1,200 and that could easily be more if you wanted a higher end GPU. All in all you're talking about a little under double the price which is roughly what an inflation calculator says (1.85x) for the same relative outcome.

4death4 3y ago

Real estate prices are only indirectly included in CPI via owner-equivalent rent. Really, CPI is a joke for measuring broad inflation. It measures a specific basket of goods. Treating that basket of goods as the true value of the dollar is absurd.

userinanother 3y ago
CPI is ok for specific categories but the basket weighting is absolutely trash. That being said somehow healthcare indexing got messed up and it was down significantly which is silly because healthcare never goes down
- em500 3y ago
  This is the current basket weighting: https://www.bls.gov/cpi/tables/relative-importance/2022.htm https://www.bls.gov/cpi/tables/relative-importance/2022.htm Which should be changed, under the constraint that they must sum to 100?
  - userinanother 3y ago
    Medical care should be weighted at 20-30% to reflect how much of a burden it’s become. Childcare is severely underweighted as well. Housing is underweighted in rents and overweighted in owner equivalent rent. Those are just the obvious ones
    - sokoloff 3y ago
      > Childcare is severely underweighted as well. Childcare is the average amount spent by all households, not only by the households which have childcare expenses. I spent essentially $0 on childcare now that my kids are old enough to stay home alone if my spouse and I go out. I expect to continue to spend $0 for the next 3-4 decades. > Housing is underweighted in rents and overweighted in owner equivalent rent. About 2/3 of Americans "own" their home. The owner-equivalent rent also happens to be about 2/3 the sum of (owner equivalent rent plus rent). That is not an accident, but rather is causally linked.

paxys 3y ago

USA is a big country. Yes housing has gone up a lot more in NYC and SF, but those numbers are offset by random farm towns in North Dakota and Iowa.

asynchronous 3y ago
Show me anywhere, in the entire US, that has gone down in pricing for housing over the last three years.
- paxys 3y ago
  Who is saying anything about prices going down?
- serf 3y ago
  that doesn't seem that hard to find.[0] plenty of regions have fallen, it just isn't a consistent decline in most cases. [0]:https://smartasset.com/data-studies/where-home-prices-fell-2023 https://smartasset.com/data-studies/where-home-prices-fell-2...
- s1artibartfast 3y ago
  It doesn't have to go down to support an 85% average increase. An equal number at 50% in the Midwest cancels 110% increase in sf.
- lotsofpulp 3y ago
  Pretty much all of western US (and I expect 90% of the rest of the US) homes have declined in previous 18 months.
dkasper 3y ago
Guessing you’ve never looked at housing in random farm towns? They all mooned in 2021 too except the really crappy ones.
- paxys 3y ago
  Home values have gone up on paper due to real estate speculation, which CPI doesn't care about. It instead measures how much you would need to pay to rent an equivalent apartment year over year.

refurb 3y ago

https://fred.stlouisfed.org/series/CSUSHPINSA https://fred.stlouisfed.org/series/CSUSHPINSA Case-Shiller is up ~220%

pcurve 3y ago

It’s doing one to one comparison of the comparable homes. Schiller looks at average home price without adjusting for newer homes being much larger and better furnished than the ones built 25 years ago

deleted 3y ago

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light_hue_1 3y ago

Oh, you're assuming that CPI is computed in a rational scientific way. And that "housing" means housing. Neither is true. Let's take a deep dive into how CPI housing is computed. You would think it could just be "track the price of every home sale in the US", or "track the price of every new rental". Ah, my naive friend, the US Bureau of Labor Statistics lives in the year 1900 as if data, electricity, compute, and statistics don't exist. Anyway, those numbers would be too scary and too objective. First, the real kicker, CPI housing doesn't measure the cost of a house! At all. Their rationale is that the a house is an investment. So it has no relationship to the Case-Shiller index at all. What do you measure if you don't measure the cost of housing? Well, you're left measuring rents, but that's not satisfying when a lot of people buy a home. So.. why don't we measure the imaginary rent that someone thinks that their house that they bought 30 years ago might be able to fetch. 3/4ths of the housing index is computed from a single quantity called the "Owners’ equivalent rent of residences". They ask people in a survey: “If someone were to rent your home today, how much do you think it would rent for monthly, unfurnished and without utilities?” Let that sink in for a moment. People who aren't renting their home. Who aren't real estate agents. Who have no idea what the cost to rent their home is. Who are homeowners and haven't rented a home in decades probably. "Bob, what do you think this would rent for?" "Ugh, $1400/month" Great! Let's base our entire understanding of the economy on the random answers of clueless people. But, remember, the Bureau of Labor Statistics needs to do everything like we're in the pre-electricity era cruising around on the latest model of horse. So they can't ask too many people. Only a few thousand people, and they keep asking the same people over and over again. Seriously, they ask the same few thousand people every 6 months what their rent is and what their imaginary rent is. They even admit this doesn't change much. And they admit this means all the data they get is garbage, it's too skewed by the particular properties of those few thousand people they randomly selected once. They could just ask 100,000 people or at least pick a different group of a few thousand every time? And then everything averages out eventually. Doing that with your horse and buggy is way too hard. Instead they adjust the junk responses they get for the type of housing, quality, etc. With a whole bunch of magic numbers that come from yet another survey of clueless people, the Department of Energy’s Residential Energy Consumption Survey, which was last run in 2020 (although I think housing CPI is computed with the 2015 run) and asked about 5000 households a bunch of questions + got some billing info from their utilities. They compute monthly CPI with an amazing formula that I think is the only use of a 6th degree square root I've ever seen in statistics (and I have CS/math degrees and do ML research; it's probably legit, but I'm not working backwards to figure out how they derived this). Oh, we're done yet! Housing also gets older all the time, we need to correct for this. That's a whole pdf. That I've never read. And I'm not sacrificing my sanity for HN. https://www.bls.gov/cpi/quality-adjustment/updating-housing-age-bias.pdf https://www.bls.gov/cpi/quality-adjustment/updating-housing-... But it has a model from January 1997 with 110 degrees of freedom. That's not confidence inspiring to say the least. Ok, so we ask clueless people to give us meaningless numbers that we then adjust based on complex largely meaningless formulas to compute an imaginary rent that doesn't exist instead of just looking at the actual cost of housing. How could this get worse? With the magic of "imputation"! A beautiful word from statistics that means "Oh, we didn't collect enough data and we have no idea what the actual number should be, so we're just going to make a number up and pretend like it's a data point we gathered based on some idea of what we think it ought to have been". Because the best data is the data you make up according to your gut. Feel free to read the horror show for yourself https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-and-rent.htm https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-an... No one with two neurons to rub together would ever adopt this methodology in the modern world. Of course none of these numbers match any of the reality that anyone experiences. Their documentation on how anything is computed reads like standup comedy.

HumblyTossed 3y ago

We plan out meals and so we have dozens of recipes that we rotate through. Keeps things not quite boring while also keeping everything in the minds of everyone in the family so that when we ask what everyone wants for suppers this week they can think of something. Anyway, this is all to say that our grocery habits are fairly consistent. Our bill is up, in the past two years alone, between 30 and 40 percent. I haven't gone back to the old receipts to confirm exactly, but looking back at some old statements confirms that range. That's just two years. Not 24.

creer 3y ago
It feels like "covid" and "supply chain issues" were a great excuse to wildly reshuffle prices, item availability, item quality and packaging quantity. ... And yet it doesn't seem visible in corporate profits. It's not very visible where that price difference is going. So I don't know yet. I'm open to useful data (which the current CPIs really are not.) By this I mean, corporate profits have increased but are still most often (never mind Apple) a small fraction of price in the retail world.
- HumblyTossed 3y ago
  > packaging quantity. Ha! Yeah, I've seen some 11oz(!!!) bags of coffee recently.

mistrial9 3y ago

it is appropriate here to question these numbers carefully -- and, this fits very well to lived experience over 25 years in a place with very high rate of change.. one might say an epicenter of these changes.. the SF Bay Area in California.. from what I read, Los Angeles metro is very similar... Seattle also.. these places I know well and these numbers are real from the ground view.

wuliwong 3y ago

I wanted to comment with a similar sentiment, particularly about housing. I think the Case Shiller index is a solid reference. My own anecdotal experienced had me buying a house and selling it 2.5 years later (in 2022) for 72% more than what I paid for it.

burritofanatic 3y ago

Agreed. I remember in 2000 that I used to be able to buy the cheapest full meal with sides at a fast casual for under $4. Now maybe it under $12!

rossdavidh 3y ago

Not that this explains all of the discrepancy between official statistics and what we see in reality, but the average size home has gone up over time, so if you're looking at price per square foot instead of price per home it would account for some of that. The increase in average home size is especially striking given that the average family size is declining.

francisofascii 3y ago

I think many areas saw a significant fall in prices in the 2009 crash, but some hot areas didn't. Those hot areas are probably 3 times as high compared to 1999, but the areas that were more normal might be closer to 1.86. Sample of one. The house I once lived in sold for $193K in 1999, I sold it for $300K in 2007 (before the housing crash), it's Zillow estimate fell to $230K in 2010. Today the Zillow estimate is $454K. So that is 2.3 the cost.

darth_avocado 3y ago

Housing prices have 2X in just last 5 years, and in some markets more. Food is definitely way more expensive. Raw foods like Beef, eggs, flour, sugar etc. all has gone up 60-80% in the last two years. So I definitely believe you when you say it is hard to believe.

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dragonwriter 3y ago

> According to the article, $1 in housing in 1999 is equivalent to $1.86 today. That's... incredibly hard to believe. The Case Shiller is up over 300% for the same time period. Case-Shiller is index of homes-as-an-asset buy prices, the housing component of CPI is housing-as-a-consumed-service rent prices. 1999 was pretty near historical lows for the buy:rent price ratio, today is just off the all-time high, so, yes, now:1999 for buying a home as an asset is very different than now:1999 for consuming housing as a service.

jjav 3y ago

> And $1 in food is $1.84 today? I don't have an index to reference, but also hard to believe. Up until 1999/2000, a Burger King Whopper was $1. Today ~$8