Recent data from the Bureau of Labor Statistics (BLS) indicates a significant slowdown in rent increases for new tenants, with the experimental 'new tenant rent index' showing only a 0.4% rise over the last four quarters, the smallest increase since 2010. Despite this, the overall 'all tenant' rent index remained stable, posting a 5.4% rise in both Q1 and Q4. This disparity highlights a lag in the consumer price index (CPI), where the owner-equivalent rent component, which does not reflect actual payments by tenants, prevents a quicker decline in measured CPI inflation. Meanwhile, in the UK, ONs data reveals that private rent inflation has escalated to 9.3%, surpassing the general inflation rate of 3.2%, exacerbating the cost of living crisis for private renters.
With new marginal rent data from the BLS we can see how much pent up deflation there is in CPI rents. For some reason people focus on growth rate graphs, which doesn't show this. Here is levels. There is a 4pp gap between the market rents and average rents. https://t.co/X4S35qbQCb
The BLS's experimental "new tenant rent index" fell again in early 2024, posting the smallest four-quarter increase (+0.4%) since 2010 But the "all tenant" rent index held steady in Q1, rising 5.4%, the same as Q4 https://t.co/5q8elyzK7M
New tenant rent growth is lower today than anytime since the Great Recession, but the lagged owner-equivalent rent (that no one actually pays) has kept measured CPI inflation from declining fast. https://t.co/sdMYKrpjPP
BLS data on rents for new tenants out today show they rose just 0.4% over the last four quarters, marking the slowest pace of advance since 2010. The largest and most important component of the consumer price index is likely soon to follow them lower https://t.co/SoTmj4vzkI
ONs data shows that private rent inflation - which is running at 9.3 per cent - is now higher than the overall rate of inflation - 3.2 per cent. Cost of living crisis is getting worse for private renters NOT better - chart is from @jrf_uk https://t.co/nuEJLnOyPa