The guy who runs the Calculated Risk website has great graphs. He also reports everything generated by the government and various associations as if they are the absolute truth. He never asks questions. Below are two recent posts from his site.
The first says that home prices have risen by 6.3% in the last year.
The second says that rental rates have risen 4.8% in the last year.
Now for the critical question that no one seems to ask. The Owners Equivalent Rent portion of the CPI Index accounts for 24% of the CPI calculation. If home prices are rising by 6.3% and rental expenses are rising by 4.8%, you would think the Owners Equivalent Rent portion of the CPI would be in that vicinity. Right?
Well spin me around and call me Sally. The Owners Equivalent Rent portion of the CPI only went up 2.1% in the last year. Those guys at the BLS are so funny. I’m sure one of these BLS drones or the guy who unquestioningly reports this drivel have a brilliant explanation for why this makes sense.
Somebody is lying.
by Bill McBride on 12/04/2012 09:01:00 AM
Home prices nationwide, including distressed sales, increased on a year-over-year basis by 6.3 percent in October 2012 compared to October 2011. This change represents the biggest increase since June 2006 and the eighth consecutive increase in home prices nationally on a year-over-year basis. On a month-over-month basis, including distressed sales, home prices decreased by 0.2 percent in October 2012 compared to September 2012*. Decreases in month-over-month home prices are expected as the housing market enters the offseason.
by Bill McBride on 10/04/2012 10:00:00 AM
Trulia today released the latest findings from the Trulia Price Monitor and the Trulia Rent Monitor … Based on the for-sale homes and rentals listed on Trulia, these monitors take into account changes in the mix of listed homes and reflect trends in prices and rents for similar homes in similar neighborhoods through September 30, 2012.
In September, asking prices on for-sale homes–which lead sales prices by approximately two or more months – increased 2.5 percent year over year (Y-o-Y). Excluding foreclosures, Y-o-Y asking prices rose 3.5 percent. Meanwhile, asking prices rose nationally 1.6 percent quarter over quarter (Q-o-Q), seasonally adjusted, and 0.5 percent month over month (M-o-M), seasonally adjusted.
Nationally, rent gains continue to outpace home price increases in September, rising by 4.8 percent Y-o-Y. Among the largest 25 rental markets, Y-o-Y rents rose the most in Houston and Miami, where they climbed more than 10 percent