The difference being that lots of people want to keep those inflated housing prices high (nimbyism), whereas nearly everyone wants car prices to go back to normal.
Nimbyism exists, as do more concrete constraints in urban locations but...
The way house prices work, often, is more or less banks determining prices via mortgage eligibility. Banks agree that a house is worth X. They lend X. That becomes the price. Buyers tend to be available.
People are so quick to see that credit expansion fuels price inflation in other areas, even the economy at large, but somehow diminish or ignore this with housing.
Obviously, supply constraints avoidable or otherwise, affect supply. In any given year though, the supply of housing does not change a ton. Where they do, you don't tend to have wild inflation... though you do often see bigger houses.
It's impossible to decouple housing from monetary policy. Housing is one of the few ways that buying power gets from A to B, where B is not a financial institution or direct spending.
>> whereas nearly everyone wants car prices to go back to normal.
There is a significant voice that would like to price cars out of private ownership. Traffic, pollution, safety, urban sprawl ... pick your evil and someone wants to eliminate private cars for that reason.
I regularly read about how the next wave of cars will all be somehow "shared", that we will whistle and they will appear at our doorsteps ready to carry us off to our 9-to-5 jobs in shiny glass office towers. I just don't see that happening anytime soon. Total conversion to electric cars in 10 years, maybe. Conversion to total ride-sharing and/or mass transit, doubtful in 30.
There's huge inflation in many things related to making cars (chips, steel, shipping costs as many cars are still being shipped across the ocean, labor costs, etc.). We are likely to be in the very beginning of significant inflation cycle, with probably double digit inflation which will eventually drop to 4-4.5%. I wouldn't expect to prices to drop any time soon, nor have 2% inflation. My bet is that fewer and fewer new cars will be sold in the next few years (3-5) with prices rising 4-10% each year.
It's not just cars, the prices are rising across the board (not evenly), so we have pretty high inflation if you add in the items official estimates excluded.
This is mostly just a reflection of the fact that the value of the dollar has declined precipitously over the last 18 months. Dollar prices are sticky, so it can take a bit of a shock for inflation to “kick in”, but we’ve had plenty of shocks to go around.
I don't think it's fair to attribute "most" of this to inflation. Car prices have been rising much faster than many other components of CPI, so even in real rather than nominal dollars cars are getting more expensive.
The stuff people actually care about has been rising faster than CPI. Cars, housing, meat, metals, lumber, etc. are all going through the roof. Inflation is a vector, and any reduction to a scalar involves taking the dot product of that vector with a weight vector. Under my personal weight vector, and I suspect most people’s weight vector, inflation is a lot higher than CPI.
I'll add a bit of a pedantic point: the dollar hasn't really lost any value _against other currencies_ (DXY) over the past year. In fact, it is a little higher.
It has lost value against lots of commodities and "real" goods.
I don't think it's necessarily NIMBY or at least my understanding of it that makes people want to keep housing prices elevated. If I buy a house at an inflated price, I want the house value to continue to rise as a large degree of my financial security is tied up in that house. My ability to refinance, take cash out and eventually even sell that house are tied to it continuing to escalate in value. In the US this is particularly true as so much of out net worth is essentially our home value. As inflation increases and peoples ability to save is even further reduced this will become even more of an issue.
I would say it is more self perpetuating. With housing prices growing as they are, people are saving less for retirement and putting that money into their house with a plan to cash out, move to the country, and retirement.
