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

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%.

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Actual Housing Costs (w/o BLS Adjustments)

Ofheo_chart_tim_i

Source: Tim Iacono

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.”

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