Inflation is edging back toward pre-pandemic rates in the US, but rent inflation still has a long way to go. To put it into numbers, the all-items consumer price index was just 3.2% higher in October than a year earlier, but the rent of primary residence index was up 7.2%. Meanwhile, the index of market rents maintained by real estate marketplace Zillow was up just 3.2% — the same as the overall inflation rate.

Rent of primary residence currently accounts for 7.6% of the basket of goods and services that make up the CPI; something called owner’s equivalent rent accounts for 25.7%. OER is, in the words of the CPI measurers at the US Bureau of Labor Statistics, the “implicit rent that owner occupants would have to pay if they were renting their homes.” Its weight in the CPI is determined by asking homeowners how much they think their homes would rent for, but the changes from month to month and year to year — the inflation rate — come from data the BLS collects on actual rents and then adjusts for the different makeup of the owner-occupied housing stock.

QOSHE - Rent Hikes of 2021 and 2022 to Boost CPI Into 2026 - Justin Fox
menu_open
Columnists Actual . Favourites . Archive
We use cookies to provide some features and experiences in QOSHE

More information  .  Close
Aa Aa Aa
- A +

Rent Hikes of 2021 and 2022 to Boost CPI Into 2026

5 0
16.11.2023

Inflation is edging back toward pre-pandemic rates in the US, but rent inflation still has a long way to go. To put it into numbers, the all-items consumer price index was just 3.2% higher in October than a year earlier, but the rent of primary residence index was up 7.2%.........

© Bloomberg

Get it on Google Play