Case-Shiller Home Price to CPI Ratio (US)
The real home price takes into account the effects of inflation and therefore allows for better comparison over time. The ratio in the chart above divides the Case-Shiller Home Price Index by the Consumer Price Index (CPI). The Case-Shiller Home Price Index seeks to measure the price of all existing single-family housing stock. Based on the pioneering research of Robert J. Shiller and Karl E. Case the index is generally considered the leading measure of US residential real estate prices.
When inflation is high, prices as measured by the CPI increase and the purchasing power per unit of currency decreases. The Case-Shiller index has a base of Jan 2000=100 while the CPI has a base of 1983=100. Therefore, it is the trend over time that is significant, and not the absolute ratio values.
This chart displays the Case-Shiller Home Price Index and US Consumer Price Index (CPI) over time.
This chart show the ratio between the UK House Price Index and UK Consumer Price Index (CPI). Both series have their base year (value=100) in 2015, therefore the ratio is 1 at this point. Since the second world war, the ratio rose steadily, showing how house price growth progressively outstripped inflation, a trend that has accelerated since the 1990s.
This chart compares the UK House Price Index and UK Consumer Price Index (CPI) over time.
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