Housing Market Index Is Up, Should Help Buoy CPI

December 17, 2013

By Knowledge Leaders Team in Uncategorized

The NAHB Housing Market Index increased to 58 to post the highest number since August, which is also the highest level of the recovery. The HMI correlates pretty well with house prices. And house prices, in turn, tend to lead CPI Owner’s Equivalent Rent. Thus, this is an important release today because housing makes up nearly 1/3 of the CPI index for United States. So even though inflation may be looking dangerously low from a headline level (as it printed a low 1.2% year-over-year gain today), stronger housing prices and rent should help keep the US out of outright deflation.

Tags > CPI, NAHB, United States

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