Real Rents Decline For the Second Consecutive Month
In June, NAHB's real rent index declined for the second consecutive month due to a surge in overall inflation. The index, which is based on Consumer Price Index (CPI) data produced by the Bureau of Labor Statistics, captures changes in residential rents and adjusts them for inflation.

While the CPI subindex measuring rent for primary residences increased to a rate of 4.6% in June (on a seasonally adjusted annual basis), the overall CPI increased at nearly triple that  rate—13.4%, the highest overall inflation rate recorded in any month since September of 2005. As is typically the case when inflation surges, the change in the overall CPI was driven by very large increases in energy prices. The result was a drop in the real rent index from 108.4 to 107.7—the first time the index has been under 108 in almost two years. In fact, from late 2006 to late 2007, the index spent twelve consecutive months above 109.

 

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 ]