[staticman2]

My point is when you own a house your expenses don't skyrocket because your neighbor sold a house for a 30% higher price this year than your other neighbor last year.

Houses may or may not be half of people's spending like the poster above claimed, but homeowners generally do not see prices inflate when a small portion of their neighbors buy or sell homes.

So whether or not housing is 50 percent of people's expenses that doesn't mean 50 percent of expenses have been subject to inflation.

[lotsofpulp]

I think archon is referring to the fact that, in the US, there are 82M owner occupied homes, and 42M renter occupied homes, and so adding up total number of people looking to purchase a house plus those affected by (presumed) changes in rental prices due to changed in land prices, you might come to the conclusion that “half of the people are involved in housing market”.

I do not know if I agree with that reasoning, but I would say that if you are looking to purchase a new home at some point in your life (even if you already have one), or you have kids or family that is looking to purchase a home, it is very possible that you are affected by your neighbors’ buying and selling in the event that it causes you to start saving more to meet the goal of purchasing a new home. And I think a large share, maybe a majority of Americans fall into this category.

For example, if I am in a “starter home” and had a goal of upgrading to a bigger home to accommodate growing family, and that bigger home goes from $450k to $750k over the course of 5 years, then that $300k increase is surely felt and dwarfs the effects of any other changes in price in a typical family’s budget. Best case scenario is you live nearby and your starter home has increased from $300k to $400k, but the price increases in lower end homes will never make up for price increases in higher end homes.

[staticman2]

64.3 percent of Americans are homeowners. The median duration of homeownership is 13 years.

So we can conclude that 5 percent of Americans might be effected by house sale in a given year, and some might be downgrading a home or moving to a cheaper location.