Housing and Inflation

Bill Ackman (via Paul at Infectious Greed and pulled from a Beracha and Johnson white paper) shows the following chart comparing the rate of appreciation required for housing to breakeven with an equivalent rental (adjusted in some concocted manner to adjust risk to match the opportunity cost for a homeowner that plans to change the quality of their residence... don't ask).

While not Bill Ackman's only rationale, the claim with the above chart seems to be that with required appreciation only ~4% (down from 9%+ in the early 1980's), the rental equivalent value hasn't been this cheap since the 1970's.

My problem?

Well for one, I am questioning Bill Ackman (not typically the best move).

But ignoring that, my problem is this does not compare the "real" appreciation needed now to "real" appreciation needed in the early 1980's, but only nominal. Nominal appreciation was easy in the early 1980's when inflation was running at 10%+, but not so much with current inflation thus far non-existent.

Want proof that inflation matters to home values? Here you go.