09-19-2022, 07:39 AM
Quote:Earlier during the pandemic, rent prices spiked as more people entered the market and household formations increased. Salviati said this jump in demand was driven in part by younger people moving out of their parents’ homes and people wanting more space as they worked from home. But there weren’t enough new units hitting the market to keep up with the demand, especially since the pandemic brought on construction delays, increased material costs, and labor shortages, Salviati said. Although government data shows rent prices continuing to pick up rapidly, there is some reason to believe that they could start to ease in the coming months...How higher rent prices are driving inflation up - Vox
But she said that rent prices in the CPI measure tend to move slowly, so it could take time for the government data to reflect the price deceleration that private-sector data may already be picking up. That’s largely because the government data also takes into account existing rentals, while many private data sources only examine prices for new leases to capture current market conditions. Since rents typically change when leases expire, which tends to happen annually, this can lead to a lag in government data.