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The move away from homeownership may be the biggest threat to continued low inflation. With...

The 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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  • Enpassant
    , contributor
    Comments (194) | Send Message
     
    I'm confused.
    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?
    31 May 2011, 01:02 PM Reply Like
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