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Owners' equivalent rent

Also called OER, rental equivalence.

How the CPI measures housing costs for homeowners: by the change in what it would cost to rent a comparable home.

The CPI doesn't use house prices for homeowners. It assumes the change in a homeowner's shelter cost equals the change in rent for a comparable property. Source 1

The price changes come from rents collected in BLS's housing survey, not from homeowners' estimates. Each rental unit is priced every six months. Source 1

Owners' equivalent rent makes up nearly a quarter of the CPI basket. Source 1 Source 2

Related terms

Where it comes up

Sources

  1. Bureau of Labor Statistics: Measuring price change in the CPI: Rent and rental equivalence (opens in a new tab)
  2. Bureau of Labor Statistics: Relative importance and weight information for the Consumer Price Indexes (opens in a new tab)

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