Despite almost 20% home price growth shelter inflation is still under 5%. Reade Pickert at Bloomberg explains how that is possible…(Bloomberg)
- Staggered. Omair Sharif, president of Inflation Insights LLC explained on Bloomberg’s “Odd Lots” podcast back in September “Every month, only about 10% to 15% of the sample actually represents new renters,” As a result, the list prices that may be rapidly changing instead show up over the course of about 12 to 18 months in the CPI.
- Less impact but it lasts longer. Dan Wilcox of Bloomberg Economics estimates the main CPI housing components could be running in the 6-7% range, faster than any other time in the last 30 years.
- Not so transitory. The category “Rent of shelter” makes up a third of the CPI basket of goods and services prices. The 6-7% range means housing costs could keep the CPI elevated well into next year.
