Real Rents Lag Behind Rise in CPI
In July, the gains that real residential rents made over the previous two months were partially reversed, according to the latest Consumer Price Index (CPI) figures released by the U.S. Bureau of Labor Statistics. In nominal terms, the residential rent component of the CPI increased at a seasonally adjusted annual rate of 3.9%. The growth in this measure of rents has been remarkably consistent over the past two years—staying between 1.75% and roughly 4.0% every month but one, on a seasonally adjusted annual basis.

Measured year-over-year, the rent increases have fluctuated within the very narrow band of 2.45% to 3.0% over the same period. The overall CPI meanwhile has been quite volatile, and the 6.4% (seasonally adjusted annual rate) increase in July is just one more example. That increase nudged the real rent index (which takes overall inflation into account) down from 107.8 to 107.6.

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