Do rising rents complicate inflation assessment?

Brent Meyer

Economic Commentary, 2012, issue Feb

Abstract: In the face of falling house prices, decreasing rates of homeownership, and a glut of vacant homes, the Consumer Price Index?s measure of the cost of owner-occupied housing?owners? equivalent rent of residence (OER)?has begun to accelerate, rising at an annualized rate of 2.3 percent over the past six months. Given a backdrop of generally subdued underlying inflation elsewhere in the index, a persistent increase in the relative price of OER?the largest component of the consumer market basket by far?may create upward pressure on measured inflation.

Keywords: Rent; Inflation (Finance); Consumer price indexes (search for similar items in EconPapers)
Date: 2012
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