Do Rising Rents Complicate Inflation Assessment?

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 residences (OER)—has begun to accelerate, rising at an annualized rate of 2.3 percent over the past...

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Bibliographic Details
Published inEconomic commentary (Cleveland) no. 2012-2; pp. 1 - 6
Main Author Meyer, Brent
Format Journal Article Trade Publication Article
LanguageEnglish
Published Cleveland Federal Reserve Bank of Cleveland 23.02.2012
Subjects
Central banks
Consumer Price Index
Consumer price indexes
Economic aspects
Foreclosure
Home ownership
Households
Houses
Housing
Housing prices
Inflation
Inflation (Finance)
Lending
Mortgages
Recessions
Rents
Rents (Property)
Statistics
Studies
Volatility
United States > US
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Summary: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 residences (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.
ISSN:0428-1276
2163-3738
DOI:10.26509/frbc-ec-201202