According to the National Association of Homebuilders, housing’s contribution to GDP generally averages in the 15-18% range and occurs in two basic ways: Residential Investment (3-5%) and Consumption Spending on Housing Services (12-13%) which includes rents and utilities paid by renters and the statistical fiction that is the owners’ imputed rents. This last one is going to be front and centre of the inflation debate over the next six to nine months as owner equivalent rent is incorporated into CPI. So now is a good time to familiarise yourself with it as we watch the Fed’s intellectual acrobatics to fob us off with their transitory inflation dogma.
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