The Most Splendid Housing Bubbles in America: “House-Price Inflation” out the Wazoo, Ignored by CPI


Wolf Street” House prices soared by 12.0% from a year ago, the biggest increase since February 2006, near the peak of Housing Bubble 1, according to today’s National Case-Shiller Home Price Index for “February,” which reflects the three-month average of sales recorded in public records in December, January, and February.

A measure of “house-price inflation.”

The Case-Shiller Index compares the sales price of a house in the current month to the price of the same house when it sold previously. This “sales pairs method” tracks the amount of dollars it takes to buy the same house over time. Home improvements are included in the methodology. This makes the index the most appropriate measure of house price inflation in the US.

The Consumer Price Index (CPI), on the other hand, tracks the housing inflation component based on rents. Read More

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