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

Monday, October 17, 2005 | 02:07 PM

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%.

Actual Housing Costs (w/o BLS Adjustments)


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.”

Random Items:

As Gazprom Grows, So Does Russia's Sway

Analyst Timing Is Off at Key Market Turning Points

China: No Longer Deflationary for the World?

The End of Cheap Oil, Once Again

Millions to receive Social Security boost

Seem like you're earning less? You aren't alone

Grand Tasting 2005 To Benefit City Harvest

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

Monday, October 17, 2005 | 02:07 PM | Permalink | Comments (7) | TrackBack (0) add to | digg digg this! | technorati add to technorati | email email this post



TrackBack URL for this entry:

Listed below are links to weblogs that reference Chart of the Week: Actual Housing Costs (w/o BLS Adjustments:


Rookie mistake, BR: You can't use OFHEO data as "actual housing costs."
It is true that home prices are rising faster than equivalent rent. BUT THEY ARE ONLY RISING FOR NEW BUYERS!
If I bought my home 30 years ago for $30,000 and it's now worth $3 million, you'd say my housing costs have gone up 10,000%. But I look at my statement and it says I paid off my mortgage this month. and my mortgage payments never budged!! (Don't ask about my taxes!!) And now I'm sitting on a fortune!!

BLS adjustments are bad, but BR adjustments are even worse!

Posted by: fred c. dobbs | Oct 17, 2005 5:25:57 PM

The comments to this entry are closed.

Recent Posts

December 2008
Sun Mon Tue Wed Thu Fri Sat
  1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31      


Complete Archives List



Category Cloud

On the Nightstand

On the Nightstand

 Subscribe in a reader

Get The Big Picture!
Enter your email address:

Read our privacy policy

Essays & Effluvia

The Apprenticed Investor

Apprenticed Investor

About Me

About Me
email me

Favorite Posts

Tools and Feeds

AddThis Social Bookmark Button

Add to Google Reader or Homepage

Subscribe to The Big Picture

Powered by FeedBurner

Add to Technorati Favorites


My Wishlist

Worth Perusing

Worth Perusing

mp3s Spinning

MP3s Spinning

My Photo



Odds & Ends

Site by Moxie Design Studios™