If homebuyers are irrationally paying significantly more than it would cost to rent the same house, then that doesn't seem to me like a valid reason to inflate the indexes.
If homebuyers push prices of housing up and that does increase rents, then it is a valid reason to adjust CPI upward, and they do, AFAIK.
What I'm saying is that many home owners are paying significantly less than it would take to rent the same house, because they bought decades ago.
Though of course there are also those who bought at high prices too.
If you want to know about rents, it would make sense to just look at rents. I wonder how the housing component of CPI would look if there were a survey that was limited to renters?
My understanding is that the index relies on estimates of what homeowners would pay in rent for equivalent housing.
If you think longtime homeowners are paying less, then substituting equivalent rent should push the CPI rate of inflation to be higher than the genuine rate. An overestimate.
So you think correctly calculated inflation is less than the CPI says?
I thought everybody who thinks it is inaccurate thinks it is an underestimate, that the government is covering up inflation being rather high.
Also, if they just didn't survey non-renters, then the result would not include how much homeowners spend on, say, hamburgers or whatever.
If homebuyers push prices of housing up and that does increase rents, then it is a valid reason to adjust CPI upward, and they do, AFAIK.