Ahead of tomorrow's CPI report. We've been banging this drum so loudly it's surprising the neighbors aren't yelling "Shut up, we're trying to sleep!" (or was that Brooklyn, 1955?)
From Bill McBride's Calculated Risk Substack newsletter, September 12 (his blog is on the blogroll at right):
Over the last several months there has been a pickup in rents, especially for single family homes.
There are three key questions:
What is happening with rents?
Why are rents increasing rapidly?
What will happen?
I don’t have all the answers, but I’ll offer some preliminary thoughts.
What is happening with rents?
Housing economist Tom Lawler has been sending me rent data since early this year indicating that rent growth was accelerating. And Christophe Barraud, Chief Economist, Strategist at Market Securities has summarized much of the recent data in U.S. Rents Rise Most On Record
From CoreLogic: Preference for Detached Properties Pushes Single-Family Rents Higher
U.S. single-family rent growth increased 7.5% in June 2021, the fastest year-over-year increase since at least January 2005[1], according to the CoreLogic Single-Family Rent Index (SFRI). The index measures rent changes among single-family rental homes, including condominiums, using a repeat-rent analysis to measure the same rental properties over time. The June 2021 increase was more than five times the June 2020 increase, and while the index slowed to a post-pandemic low last June, rent growth is running well above pre-pandemic levels when compared with 2019.
And from Zillow: Rent Prices Soar Beyond Pre-Pandemic Projections (July 2021 Market Report)
Typical U.S. rents grew 9.2% year-over-year in July, according to the Zillow Observed Rent Index (ZORI) — the fastest recorded by Zillow records in data that reaches back through 2015 — to $1,843/month. Projecting forward historical ZORI values from February 2020 — the last full month before the COVID-19 pandemic hit the U.S. in earnest — we estimate that the U.S. ZORI in July was 2.9% ($52) higher than where it would have been if the last roughly 18 months had been more ‘normal.’
....MUCH MORE, it's pretty much the definitive look at this topic.
September 8's "Another Look at Shelter Costs In The Consumer Price Index" also has some of our previous posts.
