Today saw the release of inflation numbers for December, and something weird is afoot. Despite the housing bust and widespread price declines of housing nationwide, rent (and owner's equivalent rent) in the CPI has barely declined at all!
Here's the price index for urban rents, which is off only 0.3% from the peak in June:
The story for owner's equivalent rent is identical.
But according to Reis, asking apartment rents were down 2.3% nationwide in 2009, and 0.7% in the fourth quarter. That hasn't shown up in the CPI at all yet.
Given that rent and OER together are about 30% of the CPI, and have so far shown almost no price declines, it would appear that there is some significant reported deflation on the way. This isn't exactly a prediction -- the events have already happened, it just hasn't shown up in the data yet.
No comments:
Post a Comment