Why home prices and rents are creating all sorts of confusion about inflation ๐
How is the government measuring shelter inflation? ๐คจ

Private sources of home prices, like S&P CoreLogic Case-Shiller and the National Association of Realtors, have reported declining prices.
Private sources of rents, like Zillow and Realtor.com, have reported declining rent prices.
So why do authoritative measures of inflation like the Bureau of Labor Statisticsโ (BLS) consumer price index (CPI) show that shelter prices โ which include rent of primary residence (a.k.a., tenantsโ rent) and ownersโ equivalent rent (i.e., how much a homeowner would have to pay to rent their currently owned home) โ continue to accelerate higher?
To begin to understand this, you first have to remember that most homeowners donโt buy a new house and move into it every month, and most renters donโt enter into a new lease every month. So most folks will go months or years without being affected by these regularly reported moves in home prices and rents.
DISCLAIMER: Before continuing this discussion, I will caveat by saying Iโm no econometrician, and weโre dealing with some complicated stuff that can get profoundly wonky.1 Iโm mostly attempting to offer some high-level clarifications on what seem like discrepancies in the governmentโs inflation reports.
Why home prices havenโt caused the CPI report to go haywire ๐
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