MultiFamily Market Outlook - 10/17/2006 (Plain Text Version)
In this issue:
Real Rents on an Modestly Upward Track
The real rent index edged back up in August. After inching down from 107.0 to 106.9 in July, the index—which adjusts changes in residential rents for overall inflation using information from the Consumer Price Index (CPI) series—increased to 107.1.
The components of the change break down as follows: The "rent of primary residence" sub-index of the CPI increased at a fairly healthy (seasonally adjusted annual) rate of 4.3%t during the month, in line with its average performance since March. The overall CPI, meanwhile, increased at a relatively modest rate of 3.0%.
Monthly fluctuations of the CPI often are driven by the volatility of energy prices. In August, prices for both energy services and petroleum-based energy products increased at very gradual rates, and this was a substantial factor in allowing residential rents to rise at a slightly higher rate than inflation during the month.
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