10/14/12

The price index of housing


The housing index comprises approximately a half of the headline CPI. A year ago we reported that the price index of housing had been decreasing since the end of 2008 relative to the overall CPI. This is a new trend in the difference between the CPI and the index of housing (both are seasonally adjusted) which is shown by red line in Figure 1.  Considering the current trend, we expect that the housing price index will demonstrate no actual growth or fall relative to the CPI through 2013. In other words, the housing index will evolve in sync with the headline CPI.  

Figure 1. The difference between the headline CPI and the index of housing.   

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