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> and there's always going to be items in that basket that's rising higher than average This argument is so weak. Housing is unlike those other items in that i
by boring_twenties 3y ago
> and there's always going to be items in that basket that's rising higher than average
This argument is so weak. Housing is unlike those other items in that it's both by far most households' largest expense, and difficult or impossible to substitute a cheaper version: you can move to a cheap area, but there are no decent-paying jobs there, leaving you in the same or worse boat.
And there are precious few cheaper areas left: even Vegas, long known for low cost of living, is approaching $500k for a just-ok home. At today's interest rates, that's like $3300-4100 per month all-in. Almost no one can reasonably afford that; even software development jobs barely crack $100k here.
- gruez 3y ago>This argument is so weak. Housing is unlike those other items in that it's both by far most households' largest expense that's reflected in the CPI basket construction. "Rent of shelter" which includes rent and OER makes up 34.8% of the CPI basket. > and difficult or impossible to substitute a cheaper version: you can move to a cheap area, but there are no decent-paying jobs there, leaving you in the same or worse boat. that's also factored in because they sample prices according to where people actually are. They're not taking prices across 50 states and doing a simple average.
- boring_twenties 3y agoOER also does not capture the cost of buying a house today, but of renting an already owned home. Rents do not seem to have gone up nearly as much as prices + interest rates.