[quote=jpinpb][quote=Nor-LA-SD-guy]The housing Bubble would never have happen had they not changed the CPI to owner equivalent rent in 1981 i think.[/quote]
For some reason I thought housing was not included in the CPI. Can you help me out w/that?[/quote]
Consumer Price Indexes for Rent and Rental Equivalence
see the link below
In the seventies the boomers were just starting to enter the Job and housing market driving demand and worker supply through the roof which was one of the main causes of inflation , and back in those days 7 out of 10 people were union workers so they got cost of living raises every year to 6 months (we were getting 15-18% inflation and raises back then).
For some reason the Fed in 1981 got the brilliant Idea that workers, did not need to own homes, they only needed to pay rent so why should we count home buying as an consumer necessity ??
Enter Owners Equivalent rent.
This was followed almost immediately by the late 1980’s housing bubble (still small by today’s bubble standards) then housing bust in 1990’s, then the new housing bubble in 2000’s etc…
