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Chart of the Day: Rent Inflation is Down

Crews Bank & Trust Wealth Management Services Sep 7, 2023
rent indicated by blue line

Contents

Today I have good news for renters.

Rent for apartments is a component of the broader “Shelter” economic indicator. "Shelter" includes both apartment rentals and home ownership. Since indirect costs to own a home are hard to measure and updates are slower, as house ownership does not turn as fast as apartment rentals, apartment rental figures often update more frequently. This makes apartment rentals a leading indicator, or the canary in the coal mine, for the rest of the real estate market. Since "Shelter" also makes up 42% of the Consumer Price Index (CPI) the Federal Reserve follows this industry closely.

In the chart, US rent for apartments, in blue, is falling by -0.1%, and fell from the peak of 18.2% in 2021. Rental inflation is now less than the long-term average of 3%, which means the rest of the real estate market and inflation may start to come down as well.
Chart of the Day

About the Author

Crews Bank & Trust Wealth Management Services
Crews Bank & Trust Wealth Management Services

Experienced professionals from our wealth management services team can help you achieve a bright financial future through investment strategies tailored to you. We’ll show you all of the options available and help you choose the ones best suited to you. We’ll provide high-quality, personal service as we work toward your goals together. Our Portfolio Managers do not receive commissions on trades; our recommendations of investments are based solely on your best interests.

Investments are not a deposit or other obligation of, or guaranteed by, the bank, are not FDIC insured, not insured by any federal government agency, and are subject to investment risks, including possible loss of principal.

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