The math is truly daunting for would-be homebuyers: The difference between the mortgage payments and rents is the largest it’s been since the 2006 housing bubble that led to the Great Recession.
Federal Reserve Chair Jerome Powell and his entire team should be cognizant of the fact that rents have been declining for many months. Despite this, Powell has been examining laggard data that persistently appears inflated.
After January’s disappointing ‘stall’ in the linear demise of inflation, consensus expectations were for a re-acceleration of the YoY decline in headline CPI (from 6.4% to 6.0%), and the actual print came in right on expectations (+0.4% MoM, +6.0% YoY). That is the lowest YoY CPI since Sept 2021…
A key component propping up consumer prices is cooling, but it’s not yet reflected in the government’s inflation measure, according to experts.
While the market’s volatility this week has been focused on UK pension funds and budgets and systemic risk, this morning’s US CPI print will likely determine the next leg from here with expectations for an acceleration in core inflation and small slowdown in headline growth of consumer prices.
In the earliest phases of the pandemic, many of the nation’s large cities saw sharp rent declines as a subset of renters with newly remote working arrangements moved away from expensive downtown areas that had temporarily lost their vibrancy, in search of more space in the surrounding suburbs.
Rent prices in the U.S. are rising at the fastest pace in decades, slamming U.S. households across the country, according to data from the Bank of America Institute.