Friday, September 8, 2023

Report: CPI Likely to Continue to Falling as Flat and Declining Rents Impact Future Reports is well known for its meticulous and transparent analysis of U.S. rental market trends. Their recent studies highlight the relationship between U.S. inflation trends and changes in the apartment market.

Impact of Rent on Inflation:

  • In 2021 and 2022, post-pandemic rent increases significantly influenced the rise in overall consumer prices.
  • Rent is a major consumer expense; thus, an increase in rent leads to higher inflation.

Comparison with Official Data:

  • There's a discrepancy between market data (like that from and the rental price inflation used by the Bureau of Labor Statistics (BLS) for the official consumer price index (CPI).
  • Market rent changes influence the CPI but with a slight delay.
  •'s data can predict how rent changes will impact the official inflation rate in upcoming months.

Chart Significance:
The chart compares's rental inflation estimate, the BLS's rent inflation estimate, and the overall CPI.

Click to Enlarge

Insight from Rob Warnock of

  • The Apartment List National Rent Index is a robust precursor for the CPI housing and rent components.
  • In 2021, when their index showed a record rent growth of 17.8%, the CPI's rent component was just beginning to rise.
  • By 2023, while their index indicates a cooling rental market for a year, the CPI housing component has only recently peaked.
  • Although the CPI's housing inflation remains high, the overall inflation has considerably decreased.
  • As the CPI housing component starts to reflect this cooling trend, it will further reduce overall inflation in the coming months.

Current Rental Market Trends:

  • Rents are decreasing in most U.S. markets.
  • 72 out of the 100 largest markets have reported year-over-year declines.
  • This decline is supported by factors like the completion of new apartments and a vacancy rate returning to pre-pandemic levels.

Future Outlook:

  • The data suggests promising improvements in housing affordability in the upcoming year.
  • This will also result in decreased headline inflation rates.

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