Posted on 10/25/2014 2:54:44 PM PDT by Red in Blue PA
The graph above shows that after years of holding back inflation rates, the rate of housing inflation is boosting the rate of inflation. Month-to-month housing inflation was up 0.3% compared with the overall inflation rate of 0.1%. It's not just a one-month phenomenon, either, as year-over-year shelter price increases were up 3.0% versus 1.7% for the overall rate of inflation.
Unfortunately, shelter is the single biggest component of the CPI calculation, so big moves here are magnified. For some perspective, gasoline is 5% and food is 14% of the CPI calculation. The good news is that consumers, with locked-in mortgages, won't see the inflation in terms of higher mortgage payments. In fact, housing inflation is largely determined by what home owners think they can rent their homes for and not changes in home prices or even mortgage payments.
The bad news is that the pain is real for renters. Rents are up 3.3% year over year and continuing to accelerate. As supply of rental homes and units remains constrained and demand accelerates, the rent situation may get worse before it gets better. Furthermore, it could offset some of the gains that renters were seeing from sharply lower energy prices.
(Excerpt) Read more at news.morningstar.com ...
Little things like food, energy and housing aren’t taken into consideration when determining the rate of inflation. What matters is that you can still buy cheap stuff from China.
If this government tells you the sun is going to rise in the east tomorrow morning you had better put your hand on your wallet and lock the doors.
Somehow, someway there is another government scam going on.
Somehow, someway there is another government scam going on.
Scam or skim?
The scam is the skim and the skim is the scam.
Shrinkflation is also, not calculated.
Almost 50% inflation on the essentials such as food, gas, toiletries, etc.
And yet, income declined by 10%.
US Census showed median income went from $56,000 to $51,000.
With real unemployment U6 well somewhere around 12-14% and shadowstats at about 24%, the economy sucks.
And also people are not spending money. There are now articles on how people are "hoarding" money. Well yes, people are not doing well in this Greater Depression, and as a result, they are tightening their belts, holding onto what little they have left, because they don't know what is around the corner, or in other words, how Obama and the democrats are going to screw them again.
from the excerpt.... Unfortunately, shelter is the single biggest component of the CPI calculation, so big moves here are magnified. For some perspective, gasoline is 5% and food is 14% of the CPI calculation. The good news is that consumers, with locked-in mortgages, won’t see the inflation in terms of higher mortgage payments. In fact, housing inflation is largely determined by what home owners think they can rent their homes for and not changes in home prices or even mortgage payments.
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While this addresses fixed mortgage payments, it does NOT take into account that municipal and county appraisal districts are increasing the valuation of homes every year in many areas. That results in higher property tax payments and higher home insurance premiums. Both are increases to the CPI, but seem to be ignored by this article.
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