CounterPunch Exclusives

CounterPunch Exclusives

Homeowners Insurance: A Big Item Missing From the Consumer Price Index

Photo by Jen Theodore

Since 1983, the Consumer Price Index (CPI) has used a rental equivalence measure for owner-occupied housing. This is supposed to measure the rent that could be charged if the home was rented. We can think of this as what the homeowner is paying to themselves.

It might seem a strange idea, but the prior method — measuring the increase in house prices as part of the CPI — effectively implied that homeowners were worse off if the price of their house rose by 20 percent. The logic of the rental equivalence measure is to treat owner-occupied housing as........

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