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by dragonwriter
1192 days ago
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> Even if that is true (which I am doubtful of), what is the merit of OER at all? The merit of OER is that is a measure of the cost of using owned housing as housing instead of renting it out. > Why use it if its A) not really what people are paying It is a measure of what people are paying, as an opportunity cost. > B) relying on people not in the market to guess what the going rate is Potentially a legitimate concern. > C) consistently underestimates actual rent. Its not trying to measure actual rent and is not consistently below actual rent (which, again, is tracked separately.) |
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I don't follow - can you help me understand? To me there are two metrics that matter: the price of property, and the price to rent property.
Hypothetical: If 50% of the houses in the US were bought by older folks in the 1970 - 1990 (when housing prices were more propositional to income) and they generally don't plan to sell until 2030 - what does it matter what they would rent at today?
I just don't understand the logic here, and to the fact that they are included in the CPI at all means that the CPI is necessarily skewed when it comes to housing imho