1. Table 1 Housing in the CPI and PCE Deflator, 2013 Sources: Bureau of Labor Statistics and Bureau of Economic Analysis † The CPI-U, or CPI for all urban consumers. †† Weights are equal to 2013 shares of nominal personal consumption expenditures. ††† Consumer Price Index Personal Consumption Expenditure Deflator Rent of Shelter31.67915.507Housing Owners’ equivalent rent of primary residences23.94711.399Owner-occupied nonfarm dwelling Rent of primary residence6.5683.879Tenant-occupied nonfarm dwelling Lodging away from home0.8110.712Rental value of farm dwellings Tenants’ and household insurance0.3530.104Group housing % of Total

2. Rent Inflation in the CPI Owners’ Equivalent Rent Rent of Primary Residence % Change - Year-to-Year Core CPI Source: Bureau of Labor Statistics % Change – Year-to-Year Chart 1

3. Housing Turnover, Home Price Appreciation, and OER Inflation Home Price Appreciation (right axis) Turnover Rate (left axis) Sources: Department of Commerce, Office of Federal Housing Enterprise Oversight, and Bureau of Labor Statistics Percent OER Inflation (left axis) Chart 2

4. Figure 1 Primary Sampling Unit (PSU) Segments Three strata (A, B, C), each representing one-third of total housing expenditures of the PSU. Each of the three strata is divided into two in a way that maximizes the difference in average rent levels between the two halves: A1, A2, etc. A sample of segments is drawn from each of the six strata, with a segments selection probability proportional to its aggregate housing expenditure. B1B2 C2C1 A1A2

5. Construction of CPI Tenant Rent Plus Utilities Inflation † Formula for Tenant Rent CPI Inflation: [(c.1 – [c.4 * (1 – c.6)] * c.2) * (1 – c.4)] + (c.2 * c.4) [(1 – c.4) * (1 – c.6)] + c.6 Sources: American Housing Survey, Consumer Price Index, and authors’ calculations (Used in Chart 3) Table 2

6. Tenant Rent Inflation: AHS and CPI Measures % Change – Annual Rate Note: American Housing Survey calculations made with trimming. Chart 3 % Change – Annual Rate Sources: Bureau of Labor Statistics, American Housing Survey, and authors’ calculations CPI Pooled Regression Expenditure-Weighted Predicted Growth AHS Raw Data Expenditure-Weighted Growth

7. Coefficients from Pooled Housing Cost Change Regression ⁺ 100 square feet = one unit. ⁺⁺ Positive numbers represent an improvement in neighborhood rating. Table 3 No TrimmingBacon Log of Lagged Housing Cost (t-2) -4.5350***-2.448*** Multifamily Building Dummy 1.150*-0.493* Midwest Dummy -2.091-2.638*** South Dummy -2.409*-2.083*** West Dummy -1.053-1.547*** Suburban Dummy -0.227-1.523** Rural Dummy -3.813*-2.318** Midwest x Suburban -0.7641.422 Midwest x Rural 3.1291.796 South x Suburban 1.1721.713* South x Rural 3.4272.330* West x Suburban 0.02141.344* West x Rural 3.6912.497* Sq. Feet ⁺ -0.0002100.0000471 Change in Sq. Feet -0.000090-0.0000964 Neighborhood Rating ⁺⁺ 0.2560.00677 Change in Neighborhood Rating 0.109-0.137* 1993 0.7000.668 1995 1.147-0.0939 1997 4.757**2.708*** 1999 4.251**3.321*** 2001 3.268***-0.409 2003 5.763***2.415*** 2005 4.950***3.268*** 2007 4.853***2.893*** 2009 2.884**0.458 2011 2.337*-0.129 Constant 30.77***20.31*** Observations 4247342028 R^2 0.0050.010 Root Mean Squared Error 45.7621.10 Note: *, **, *** stands for significance at the 10, 5, and 1 percent levels, respectively. Fixed time effects (not reported) included in the regression. Sources: American Housing Survey and authors’ calculations

8. Table 4 Tenant Rent and OER Inflation: AHS vs. CPI Sources: American Housing Survey and Bureau of Labor Statistics Note: American Housing Survey calculations made with trimmed data. Expenditure-weighted, annualized predicted growth rates reported. † Tenant Rent CPI calculations documented in Table 2. †† Owners’ Equivalent Rent CPI calculations documented in Table TEMP.

9. Chart 4 CES Rent-Price Ratio Estimated Monthly Rent and Utilities ($) Sources: Bureau of Labor Statistics and Haver Analytics Reported Home Value ($) 1991: Y = -2.25*10 -8 X 2 + 0.0105X + 65.495 2001: Y = -2.09*10 -8 X 2 + 0.1269X - 4.3101 2011: Y = -1.17*10 -8 X 2 + 0.0105X + 41.5337

10. Construction of CPI Owners’ Equivalent Rent + Utilities Inflation † Formula for OER CPI Inflation: [c.1 * c.4] + [c.2 * (1 – c.4)] Sources: American Housing Survey, Consumer Price Index, Bureau of Labor Statistics, and authors’ calculations (Used in Chart 5) Table 5 †† Calculated by averaging each unit’s monthly utility expenditures divided by estimated monthly rent and utilities (estimated using reported home value and the methodology documented in Chart 4).

11. OER Inflation: AHS and CPI Measures % Change – Annual Rate Note: American Housing Survey calculations made with trimming. CPI Chart 5 % Change – Annual Rate Pooled Regression Expenditure-Weighted Predicted Growth Sources: Bureau of Labor Statistics, American Housing Survey, and authors’ calculations

12. Distribution of Predicted Housing-Cost Inflation: 2009-11 Annualized Rent Inflation Density Source: American Housing Survey Note: Empirical distributions smoothed using a normal kernel with bandwidth parameter of 0.2404 for renters and 0.1482 for owners. Chart 6 Owner-Occupied Units Weighted Mean: 2.15 Mean: 2.65 Weighted Mean: 3.35 Mean: 2.70

13. Annualized Rental Growth Density Source: American Housing Survey Note: Empirical distributions smoothed using a normal kernel with bandwidth parameter of 0.2404 for renters and 0.1482 for owners. Expenditure-weighted results reported. Chart 7 Owner-Occupied Units Distribution of Predicted Housing-Cost Inflation by Housing-Cost Quintile: 2009-11

14. Housing Cost and Utilities by Housing-Cost Quintile Table 6 Note: Quintiles are derived from the trimmed renters data set. Housing costs include monthly rent and utilities, where utilities include average payments for electricity, gas, fuel oil, and other fuels, water and sewage, garbage and trash. Source: American Housing Survey

15. Utilities and Rent Inflation by Housing-Cost Quintile Table 7 Note: Quintiles and percent changes are derived from the trimmed renters data set. Expenditure-weighted, annualized growth rates reported. Utilities include average payments for electricity, gas, fuel oil, and other fuels, water and sewage, garbage and trash. Source: American Housing Survey

16. AHS (3 rd Quintile) CPI Sources: Bureau of Labor Statistics, American Housing Survey % Change – Annual Rate Chart 8 Utilities Inflation: AHS and CPI Measures Note: AHS percent changes are reported for the 3 rd quintile (see Table 6). AHS utilities include average payments for electricity, gas, fuel oil, and other fuels, water and sewage, garbage and trash. CPI series prior to 1999 is for energy services only. After 1999 it is a weighted average of energy services and water, sewage, and trash removal services.

17. Housing Unit Dynamics by Income Quintiles Note: Income ranges represent nominal incomes. Income quintiles have been deflated to 2009 dollars using the PCE deflator. Source: American Housing Survey Table 8 (Millions of Units) Total Income Range ($)Change Due To 19892013Income Quintile Change in Units 1989-2013 Within Tenure Net Filtering Cross Tenure Net Filtering New Construction Net Conversions Within Quintile Switches 0 - 10,9990 - 17,9861 - lowest4.51-1.52-0.393.093.32- 11,000 - 21,39917,987 - 34,97324.470.260.324.44-0.54- 21,400 - 31,99934,974 - 58,39935.271.700.526.03-2.98- 32,000 - 50,99958,400 - 97,89944.030.620.218.00-4.80- 51,000 - 400,00097,900 - 1,061,9215 - highest4.34-1.06-0.6610.76-4.71- Total 22.61 0.00 32.33 -9.71 Renter-Occupied Income Range ($)Change Due To 19892013Income Quintile Change in Units 1989-2013 Within Tenure Net Filtering Cross Tenure Net Filtering New Construction Net Conversions Within Quintile Switches 0 - 7,1990 - 9,9861 - lowest2.980.590.701.55-0.050.19 7,200 - 13,9999,984 - 21,45921.450.960.941.54-2.270.27 14,000 - 21,99921,460 - 34,98631.540.380.831.39-0.78-0.28 22,000 - 32,82434,987 - 56,99940.23-1.100.640.94-0.18-0.07 32,825 - 266,00057,000 - 730,8735 - highest0.56-0.830.200.770.420.00 Total 6.76 0.00 3.31 6.19 -2.86 0.11 Owner-Occupied Income Range ($)Change Due To 19892013Income Quintile Change in Units 1989-2013 Within Tenure Net Filtering Cross Tenure Net Filtering New Construction Net Conversions Within Quintile Switches 0 - 14,7950 - 25,0361 - lowest1.53-2.11-1.101.553.37-0.19 14,796 - 25,99925,037 - 45,98623.03-0.70-0.622.891.73-0.27 26,000 - 39,99945,987 - 72,99933.731.32-0.314.64-2.210.28 40,000 - 59,99973,000 - 114,96043.791.72-0.437.06-4.620.07 60,000 - 400,000114,961 - 1,061,9215 - highest3.78-0.23-0.869.99-5.130.00 Total 15.85 0.00 -3.31 26.13 -6.86 -0.11

18. Hypothetical Example of CPI Methodology † Unobserved; estimate based on property value Table for Box 3 Sample (Observed) Row 1ABC32010 Type11212 Units Renters100 1503502,5001,0001,500 Owners150 1004002,5001,5001,000 Total250 7505,0002,500 Rent Level (Period 1) Tenants' Rent400 200 OER † 400 200 Housing Expenditures Renters40,000 30,000110,000700,000400,000300,000 Owners60,000 20,000140,000800,000600,000200,000 Total100,000 50,000250,0001,500,0001,000,000500,000 Row 2Probability of Segment's Inclusion in Sample0.067 0.033 Row 3Segment Weight15 30 Number of Sampled Units Renters10 15 Owners15 10 Row 4 Total25 Row 5Ratio of Total to Sampled Units (HU/SU)10 Row 6Renters' Share of Total Housing Costs (RC/TC)0.4 0.6 Row 7Owners' Share of Total Housing Costs (OC/TC)0.6 0.4 Rent Change Calculation Renters Renters' Weight60 180 Total Rent Period 124,000 36,00084,000700,000400,000300,000 Total Rent Period 224,960 36,72086,640722,000416,000306,000 Row 8 Percent Change4.00% 2.00%3.14% 4.00%2.00% Owners Owners' Weight90 120 Total Rent Period 136,000 24,00096,000800,000600,000200,000 Total Rent Period 237,440 24,48099,360828,000624,000204,000 Row 9 Percent Change4.00% 2.00%3.50% 4.00%2.00% Universe (Estimated) Segments