THE AMERICAN economy last year may have suffered its deepest downturn since the Depression, but you would not know it from house prices. The Case-Shiller national house-price index is rising at an annual rate of 13%, its fastest for more than 15 years (see chart). Lower interest rates have encouraged people to take out bigger mortgages, and trillions of dollars of fiscal stimulus have let people spend more on housing.

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Yet as prices have breezed ahead, rental growth, which usually follows suit, has sharply slowed. And whether rents catch up or not matters, because they play an outsize role in America’s consumer-price inflation statistics. In a recent note analysts at Goldman Sachs, a bank, ranked housing costs among their three main “upside” risks to inflation, together with wages and inflation…

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