The charts below show the current situation for two popular questions — which is better, renting or buying? and how high would home prices be if inflation is removed? The Rent vs. Buy is just slightly into the rent region on the top half of the chart. Given that these are broad based indices — the S&P/Case-Shiller 10-City Index and the national consumer price index component for rent of a primary residence, it might be best to call this neutral. The second chart shows the S&P/Case-Shiller 10-City Index before and after adjustment for inflation. The adjustment is with the Consumer Price Index. Excluding Inflation, home prices are close to the inflation-adjusted levels in 2001-2202.
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