Home Price Disconnect Notes

National is the Case-Shiller national home price index.

10-City represents the weighted average of the cities in the first chart.

CPI is the Consumer Price Index

OER stands for Owner's Equivalent Rent. It is the single largest component in the CPI with a current weight of 24.151% of the total CPI.

Rent of Primary Residence is a CPI component with a weight of 7.374% of the CPI.

OER is the mythical price the Bureau of Labor Statistics (BLS) says one would pay to rent one's own house from oneself, unfurnished, without utilities.

Percent Change From Year Ago Notes (March 2022)

CPI: 8.52%

OER: 4.56%

Rent: 4.46%

Case-Shiller 10-City: 19.49%

Case-Shiller National: 20.56%

CPI Understated?

Yes, by a lot.

I do not believe OER is only up 4.56%. Nor do I believe rent is only up 4.46%.

Moreover, home prices are not directly in the CPI, only OER and and Rent.