Rents Lose More Ground
In January, NAHB's real rent index — which adjusts  rents for inflation using Consumer Price Index (CPI) data — continued to lose ground, falling to the lowest level recorded since October of 2008. The latest release of CPI data from the Bureau of Labor Statistics shows the overall CPI increasing at a (seasonally adjusted annual) rate of 2.0.

This is a relatively mild rate of overall inflation, but still enough to outpace the 0.5% rate of increase in the CPI subindex measuring rents for primary residences. The combination caused the real rent index (constructed to decline when inflation exceeds the growth in rents) to edge downward from 110.4 to 110.3. The January CPI release also coincides with the  computation of new seasonal factors and the revision of several  years of historical CPI data. The revisions did little to alter the pattern of changes in the real rent index, however. The graph still shows the index climbing to an all-time high point in May of 2009 and declining each month thereafter.

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 ]