>I should clarify that I mean the "prices people pay for housing move slowly" even if they prices of available housing move quickly for the reasons I mentioned above.
It's not right to count fixed prices in inflation figures. If you are locked into a lease or mortgage, you're not a market participant and any perceived non-increase in prices is tangential to the behavior of the money supply. But the government can't let a good excuse go to waste, which I explain below.
>It's the kind of thing that would explicitly not be reflected in inflation indicators because no price is being paid but would be felt as a negative effect of inflation by people experiencing it.
Actually, there is a very goofy methodology used to estimate housing costs in the official CPI called "owner's equivalent rent". Basically owners of housing are surveyed and asked how much their properties would rent for, which they obviously would tend to underestimate because they are actively out of the rental market in general. This is another reason CPI is a bad measure of inflation. There are many adjustments with plausible excuses, which cumulatively add up to a significant understatement of inflation numbers.
It's not right to count fixed prices in inflation figures. If you are locked into a lease or mortgage, you're not a market participant and any perceived non-increase in prices is tangential to the behavior of the money supply. But the government can't let a good excuse go to waste, which I explain below.
>It's the kind of thing that would explicitly not be reflected in inflation indicators because no price is being paid but would be felt as a negative effect of inflation by people experiencing it.
Actually, there is a very goofy methodology used to estimate housing costs in the official CPI called "owner's equivalent rent". Basically owners of housing are surveyed and asked how much their properties would rent for, which they obviously would tend to underestimate because they are actively out of the rental market in general. This is another reason CPI is a bad measure of inflation. There are many adjustments with plausible excuses, which cumulatively add up to a significant understatement of inflation numbers.