BusinessRental prices may have peaked in November – new data suggests they...

    Rental prices may have peaked in November – new data suggests they will fall by 2023

    The inflationary rise in November was largely fueled by high prices in the housing sector, which includes rents; however, the real-time behavior of the market would show an opposite trend.

    This week it was learned that inflation in November reached 7.1% in its interannual component, according to the Bureau of Labor Statistics, of this data, housing prices contributed a third of the total.

    In his month-by-month comparison, rental prices increased by 0.6%while year after year, the increase was 7.1%, in line with general inflation.

    The scenario would seem very challenging for consumers, were it not for the fact that in real-time measurements, rental prices nationwide show a downward trend for the third consecutive month.

    While rental prices continue to rise in the CPI, the data shows that growth rates have reached a “peak point” and from this moment it is expected that they begin to fall.

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    “It is becoming increasingly clear, from private sector rental data, that the next big move in the CPI measure will be a substantial slowdown”, considered the chief economist of Pantheon Macroeconomics, Ian Shepherdson, in a report for yahoo finance.

    Shepherdson’s prediction is not accidental and finds support in the real-time data collected by the Zillow Rental Index, which shows a 0.4% drop in rental prices requested for new contracts between October and November.

    This data would be the largest drop recorded in the seven years in which the Zillow survey has been carried out, however, median rental price is now $2,0088.4% more expensive compared to November 2021.

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    “The market has changed very quickly, from one that favored homeowners, to one that is really shifting in favor of renters who see more choice,” said Jay Parsons, vice president and head of Economics and Industry for RealPage.

    According to data from this company, the rise in rents is slowing down and last November it reached 6.5%, in its annual measurement, the lowest record since June 2021.

    For the Federal Reserve, the discrepancy in the data would indicate that the drop in inflation could occur from the rental market, where it is seen that the new contracts that are signed are doing so with lower rates.

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    “We see that the rate of new leases is going down. So once we get past that delay, inflation will come down sometime next year“, pointed out the president of the Fed, Jerome Powell, this Wednesday when announcing the 0.50% rise in the reference rate, the last of seven that he carried out this year.

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    Source: La Opinion

    This post is posted by Awutar staff members. Awutar is a global multimedia website. Our Email: [email protected]


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