From The Wall Street Journal, "
While All Inflation Feels Bad, Housing Inflation Is the Worst: For some, unaffordable homes undercut the American dream even more than high gasoline and food prices" by Greg Ip:
Housing is an entirely different matter. The Bureau of Labor Statistics, which compiles the CPI, doesn’t measure the cost of homeownership with home prices. Rather, it estimates what a homeowner would pay to rent their own house. This “owners’ equivalent rent” tends to track rents rather than houses and is up 17% since the start of 2021.
But if you’re actually in the market, what matters is the price of a home and the mortgage rate. Since January 2021, home prices, despite a late 2022 dip, have risen 29%, according to the S&P/Case-Shiller national home price index, and mortgage rates have nearly tripled. The buyer of the typical home thus faces a monthly principal and interest payment of nearly $2,200, more than double the level of early 2021, the National Association of Realtors calculates. No wonder the net share of consumers telling the University of Michigan it is a good time to buy a home is the lowest since 1982.
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