Housing prices (one of the leading drivers of real inflation) is excluded from CPI and inflation coefficient because real estate market is volatile and housing is deemed investment asset rather than a consumer good.
This is why we have 2-3% inflation across the Western world and generally unaffordable housing there.
I believe that some parts of housing are included, like rental costs, which most people around the poverty line are paying instead of a mortgage. Since renting is consumptive instead of asset generating.
But yeah, this doesn’t capture the additional disparity between rental and purchase prices, and that’s huge in trying to own your home.
Housing prices (one of the leading drivers of real inflation) is excluded from CPI and inflation coefficient because real estate market is volatile and housing is deemed investment asset rather than a consumer good.
This is why we have 2-3% inflation across the Western world and generally unaffordable housing there.
I believe that some parts of housing are included, like rental costs, which most people around the poverty line are paying instead of a mortgage. Since renting is consumptive instead of asset generating.
But yeah, this doesn’t capture the additional disparity between rental and purchase prices, and that’s huge in trying to own your home.