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The move away from homeownership may be the biggest threat to continued low inflation. With...
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Tuesday, May 31, 2011, 10:53 AM ETThe move away from homeownership may be the biggest threat to continued low inflation. With shelter representing 40% of CPI, the rising cost of rentals is responsible for a good chunk of higher reported inflation and the outperformance of rental REITs and stocks. AVB +16%, ESX +19%, EQR +17%, UDR +10% YTD.
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Doesn't this statement misinterpret the effect of a change in home values on inflation indices?
I thought the CPI uses imputed rent as derived from home values.
Thus, as Case-Shiller declines- even if real world rents rise- inflation would, all else being equal, show a matching decline?