From Fortune:

Inflation continues to plague the economy, with housing costs at the heart of the issue, contributing two-thirds to core CPI increases over the past year. Experts expected a fall, but rent data reliability issues and a lag in government measurements have distorted CPI data, leading to erroneous projections and a disconnect from actual market conditions. A chief contributor to inflated housing costs is the government’s way of measuring values through owner’s equivalent rent instead of outright home prices, which relies on data gathered via a questionnaire. The slow collection data process results in a severe lag of up to 18 months, making it difficult for the CPI to reflect real-time market conditions accurately. Additionally, the localized nature of the housing market means that the national picture painted by CPI measures may not accurately reflect conditions in specific areas, making local market trends more valuable for consumers.



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