Rent Increases Almost Kept Pace with Inflation
Rents narrowly missed keeping pace with inflation in July, according to NAHB's real rent index, which adjusts residential rents for overall inflation using data from the Consumer Price Index (CPI). In July, the overall CPI increased at a 5.5% rate (on a seasonally adjusted annual basis), while the residential rent component of the CPI (which is based on all rental units, including single family) increased at a rate of 4.4%.
Beyond a surge in energy costs, prices for transportation and food also increased by at least as much as rents. This caused the real rent index to edge down, but only by a tenth of a point, from 107.0 in June to 106.9.
The index has basically been marking time, staying within in a narrow band around 107 since last November. Prior to that, the index had been threatening to break above the 108 mark throughout much of 2003 and 2004, before plummeting and then partially bouncing back in the latter part of 2005.
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