Chart Notes

Case-Shiller measures repeat sales of the same price over time. It is the best measure of price, but it lags. Current data is as of May which reflects sales 1-3 months prior.

The CPI, OER, and Rent of Primary Residence are all from the BLS.

OER stands for Owners' Equivalent Rent. It is the rent one would pay if someone was renting instead of paying a mortgage.

Not Inflation?

Economists consider homes a capital expense, not a consumer expense. On that basis homes are not in the CPI. It's a serious ongoing mistake.

Existing Home Sales Drop 5.4 Percent But Median Price Hits New Record

Sales are down 38.6 percent from the January 2022 high and barely above the October 2023 low (yellow highlights).

Existing-home sales declined 5.4 percent in June. It was the 23rd decline in 29 months. But the median price hit a new record.

On July 23, I commented Existing Home Sales Drop 5.4 Percent But Median Price Hits New Record

The median existing-home sales price bounced 4.1% from June 2023 to $426,900 – the second straight month it reached an all-time high and the twelfth consecutive month of year-over-year price gains.

The Problem With Measuring Prices

Case-Shiller measures the price of the same home over time.

Median and average prices have no consistency on number of rooms, square footage, location, amenities, lot size, or quality of construction.

Median and average price are also skewed by a slowing number of transactions heavily influenced by price-insensitive buyers.

Although median price is a poor measure, the rising direction is consistent with Case-Shiller reporting.

The problem with Case-Shiller is timeliness. We are heading into August and Case-Shiller is just reporting May data. And that data represents transactions from a couple months prior.

Signs of Severe Stress

The economy is slowing and that will hit the zoomers first and the hardest, especially renters.