| Shelter in the U.S. is a problem... Last week, I outlined how the cost of shelter is poorly measured by the Federal government. And how this mismeasurement contributes to an overestimation of inflation that distorts both perceptions about the economy and policy responses (you can read that column here). But the fact that the price Americans pay to house themselves and their families is not measured correctly doesn't mean it's not high, or that there are enough homes for all the individuals and families that need one. In fact, the cost of housing - both to buy and to rent a place to live - is extremely high right now, by historical standards. The price of homes has risen substantially over recent decades, even after adjusting for inflation. And that increase in prices has outpaced increases in household incomes. Now to be clear, this is not typical inflation. As I pointed out last week, about two-thirds of American households own their home, and more than 90% of those households have a fixed-rate mortgage. So for all of those people, shelter costs are not changing month to month (even though the flawed way shelter costs are measured suggests they are). The real problem with rising costs of shelter is for renters - as rent does change frequently. And for people who don't own a home but want to purchase one. That primarily impacts two groups: low-income Americans and younger adults - the millennial generation, in particular. For these people, finding shelter adequate to their needs can be almost prohibitive. So, what's going on? There are a few factors causing this problem, and they are interrelated. | 
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