Inexact Index

Last week, NAR reported home prices rose by a stunning 23.6% Y-o-Y. Indexes that compare the change in price of the same home, which is how the CPI measures consumer inflation, and which carefully control for the mix of homes sold, show Y-o-Y home prices appreciating at an impressive 15%, great, but not nearly the NAR number! NAR’s number is so high because sales of very expensive homes have doubled.