Real Rents Climb Back Up
The real rent index (which adjusts residential rents for overall inflation) continued its gradual climb back from the low point it reached in September.
The index (after a consistent upward trend that persisted over several years) has basically been meandering without signaling a clear direction since mid-2003. The recent tendency has been for each decline to be followed within a few months by a rise of roughly equivalent magnitude. The last such cycle began in June, when the index declined over a four-month period from 107.8 to 106.4, then recovered for three consecutive months back up to 107.4 by the end of 2005.
Based on seasonally adjusted Consumer Price Indices; U.S. Department of Labor, Bureau of Labor Statistics. The annual rates indicate what the percentage change would be if the current monthly rate were sustained over a 12-month period. The real rent index is the CPI for rent of primary residence divided by the CPI for all items and scaled so that January 1995 is 100.
Keep in mind that the index is based on rents paid for single-family as well as multifamily housing units. This rent data, collected for the Consumer Price Index by the Bureau of Labor Statistics, is used in the index because it represents the only source of timely information on rents provided on a monthly basis by a federal agency.
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