- The Big Picture - http://www.ritholtz.com/blog -

Chart of the Week: Actual Housing Costs (w/o BLS Adjustments

Posted By Barry Ritholtz On October 17, 2005 @ 2:07 pm In Economy,Inflation,Real Estate | Comments Disabled

Before 1983, CPI measured housing inflation by looking at
what it cost to own a home (house prices, mortgage, property taxes). After 83,
BLS changed the housing component, using the concept of Owner’s Equivalent
Rent. Revert back to the true cost of housing, and Core CPI spikes to a more
realistic 5.3%.

<spacer>
Actual Housing Costs (w/o BLS Adjustments)

Ofheo_chart_tim_i [1]

Source: Tim Iacono [2]

BLS perversely lowers Owner’s Equivalent
Rent
further as utility costs go up: “CPI calculated the pure rent of the
matched renters by removing the value of any landlord-provide utilities.”

Random Items:

As Gazprom Grows, So Does Russia’s Sway [3]

Analyst Timing Is Off at Key Market Turning Points [4]

China: No Longer Deflationary for the World? [5]

The End of Cheap Oil, Once Again [6]

Millions to receive Social Security boost [7]

Seem like you’re earning less? You aren’t alone [8]

Grand Tasting 2005 To Benefit City Harvest [9]

Quote of the Day:

"Failure is a part of success. There is no such thing as a bed of roses all
your life. But failure will never stand
in the way of success if you learn from it."
~ Hank Aaron [10]


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2005/10/chart-of-the-week-actual-housing-costs-wo-bls-adjustments/

URLs in this post:

[1] Image: http://bigpicture.typepad.com/.shared/image.html?/photos/uncategorized/ofheo_chart_tim_i.jpg

[2] Tim Iacono: http://photos1.blogger.com/img/115/6336/1024/CPIandHomePrices.jpg

[3] As Gazprom Grows, So Does Russia’s Sway: http://www.latimes.com/business/la-fi-gazprom16oct16,1,4499026.story

[4] Analyst Timing Is Off at Key Market Turning Points: http://www.financialsense.com/Market/goldberg/2005/1006.html

[5] China: No Longer Deflationary for the World?: http://www.morganstanley.com/GEFdata/digests/20051014-fri.html

[6] The End of Cheap Oil, Once Again: http://www.fpri.org/enotes/20051010.econ.munk.endofcheapoil.html

[7] Millions to receive Social Security boost: http://www.businessweek.com/ap/financialnews/D8D816S83.htm?campaign_id=apn_home_down&chan=db

[8] Seem like you’re earning less? You aren’t alone: http://www.boston.com/business/personalfinance/articles/2005/10/16/seem_like_youre_earning_less_you_arent_alone/

[9] Grand Tasting 2005 To Benefit City Harvest: http://www.pjwine.com/html/events.html

[10] Hank Aaron: http://www.sportingnews.com/archives/aaron/

Copyright © 2008 The Big Picture. All rights reserved.