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Comment by jefftk | Hacker News Reader

Some things in the "basket of goods" we use to compute inflation have gone up more than others, and housing is definitely one of them.

You can compute exactly how much by dividing https://fred.stlouisfed.org/series/MEHOINUSA646N by https://fred.stlouisfed.org/series/MSPUS Here's a sheet where I've done this: https://docs.google.com/spreadsheets/d/14NVqsKXnswG27TiwENpi...

But note that some of the change here is people building and buying larger houses as we get richer, which inflation calculations account for and this division does not.

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Average rent per square foot since 2014 has increased by 42% [1]. By your unadjusted income chart, incomes have only increased by 33% in that time. In my case, existing just to the left of the income median, that's meant going from comfortably affording a 2br apartment and weekly dinner out, to barely squeaking by in a small 1br. Add in a $600 car payment (which I have managed to avoid), and it's not possible to live reasonably.

[1] https://ipropertymanagement.com/research/average-rent-by-yea...

For many people housing isn't part of a basket, it is the basket.

If food prices go up, it hurts psychologically but it's not the end of the world. I can buy cheaper food, I can buy less food, I can eat out less. Most people in the developed world are very far from food price-induced famine. I can buy a year's worth of sustenance for a thousand dollars, it might not be healthy but I'm not going to die.

Housing is qualitatively different. Many renters are only a few steps away from homelessness, and more people rent nowadays because they cannot afford to buy. It's hard to adjust for increases in housing costs by buying cheaper housing, your housing is linked to your income.

I complain about but don't ever worry about food prices, yet the roof over my head is a real cause for concern.

For my parents' generation it was the opposite, being overweight was more uncommon, housing was dirt cheap, people worried about getting enough calories rather than too many. Indexing wages to inflation is an anachronism that we have taken into this new world.

> It's hard to adjust for increases in housing costs by buying cheaper housing

I think this is mostly not true? You can adjust for housing becoming more expensive by changing your consumption patterns, just as you describe with food. It's still rough, but unless your family is living in single room in a shared unit (or, if you're single, sharing a room) there are choices between "consume housing at your current level" and "be homeless".

The CPI-U table has housing as 37% of the overall basket: https://www.bls.gov/news.release/cpi.t01.htm What do you think it should be?

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