Matching Market Rental Data to
Apr-23 CPI Shelter Data
The BLS reported that CPI shelter increased year-over-year by 8.1% (Col 2 Table 1). The CPI rent indices (OER and Shelter) are lagging indicators of the market by about 12 months. Columns 3 and 4 show year-over-year rent appreciation for three-bedroom single family properties and apartments (all bedroom sizes) in multi-unit buildings.
Recognizing the long lag structure of Shelter based upon market data, CPI Shelter will slow but remain a major contributor to core CPI. This might require additional interest rate hikes by the Federal Reserve.