U.S. inflation likely to remain elevated for up to four years – BofA
Here&#x27;s the problem - we use the Consumer Price Index to measure inflation, of which &quot;housing&quot; is only 33% - much of which is actually rent, which is quite a bit more inelastic than home prices. If someone buys an 8 unit condo building in 1980 and rents out each unit for a 20% profit, 20 years later they&#x27;re still making a 20% annualized profit and maybe rent hasn&#x27;t increased.<p>Asset inflation is inflation. That &quot;real&quot; inflation, also known as the consumer price index, hasn&#x27;t been going up is a factor of both automation&#x2F;economies of scale and an extremely bifurcated economy in which low end workers are making pennies, toilet paper is cheap, but a house in an area with a working economy costs triple what it did 10 years ago.<p>Here&#x27;s the case shiller national home pricing index:<p><a href="https:&#x2F;&#x2F;fred.stlouisfed.org&#x2F;series&#x2F;CSUSHPINSA" rel="nofollow">https:&#x2F;&#x2F;fred.stlouisfed.org&#x2F;series&#x2F;CSUSHPINSA</a><p>Compare that to any inflation chart. Its not supposed to be the same, but I posit the &quot;housing&quot; part of the CSI is almost completely inelastic and only reflects what people pay in rent&#x2F;mortgage, not the cost of entry. Housing prices can go up by 20% a year for 5 years and there&#x27;s still no &quot;inflation&quot;.