Revisions to the CPI Reflect Weaker Real Rents in Late 2007
 

NAHB calculations—based on new data released by the Bureau of Labor Statistics (BLS)—show that, in real terms, residential rents remained flat as we crossed into 2008. This is one of the months when BLS essentially rewrites history, calculating new seasonal factors for many of the Consumer Price Index (CPI) series, and revising the old numbers.

Although the revisions to the CPI component  measuring residential rent were not very large, some of the revisions to the overall CPI were substantial. In particular, the revised series indicate that overall inflation was significantly higher toward the end of 2007 than reported last month.

As a result, the real rent index (which adjusts changes in residential rents for overall inflation) now appears somewhat weaker at the end of 2007. The revised series still show the real rent index rising to a peak of 109.4 in October, but now show a sharper decline in November, with no recovery thereafter—including in January of the new year.

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. [ return to top ]