Getting Real. Switched from using CPI-U to "CPI-U Less Shelter" to Adjust the Case-Shiller Index for Inflation
Inflation-Adjusted Case-Shiller Home Price Index is now more accurate.
I converted all my Case-Shiller Home Price Index graphics to using "CPI-U Less Shelter" to adjust for inflation instead of using CPI-U. It’s a nice improvement to their accuracy.
Since Case-Shiller itself directly measures home price inflation, it's better to use a deflator that doesn't also incorporate home price changes.
Real home prices were a bit higher using "CPI-U Less Shelter" as the deflator. For example, with the 1990 Baseline shown above, the inflation-adjusted Case Shiller Index for the USA in November 2020 was 149 using CPI-U, and 160 using CPI-U Less Shelter.
Now I’m going to see if I can incorporate income into Case-Shiller. That’ll be a big project.