“Why doesn’t the CPI include the cost of buying and financing houses as well as property taxes and home maintenance and improvement?
Houses and other residential structures are not consumption items and, therefore, should not be CPI items. All buildings and structures are capital goods, which are items that provide a service. In the case of houses and other residential structures, that service is shelter.
Buildings and structures are also investment items, things that are bought and resold in organized markets with a potential for gain. House prices frequently appreciate; in this respect they differ from consumer durables such as vehicles.”
Don’t houses depreciate while the land is what appreciates? IANE, but I thought some people in the states had a depreciation deduction on the building.
https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-an...
“Why doesn’t the CPI include the cost of buying and financing houses as well as property taxes and home maintenance and improvement?
Houses and other residential structures are not consumption items and, therefore, should not be CPI items. All buildings and structures are capital goods, which are items that provide a service. In the case of houses and other residential structures, that service is shelter.
Buildings and structures are also investment items, things that are bought and resold in organized markets with a potential for gain. House prices frequently appreciate; in this respect they differ from consumer durables such as vehicles.”