Sharing is Caring!
CPI from the BLS says that rents are up 5% over the last 12 months, but that’s not even close to reflecting the rents shown elsewhere. We all know this though, ask anyone about their rent and you’ll get some anecdotes saying 2-5%, but you’ll get a lot more saying 15-30%.
The chart below shows how the Zillow rent index and the CPI rent index starting in January 2018.
Now you’ll hear a lot of economists and “transitorians” saying this divergence is just due to delays in asking rents (zillow) becoming the realized rents (CPI) that people actually pay. This is because rents get locked in for a year at a time so it takes time for leasing cycles to go through.
I agree, so I’ve also produced a chart showing a lagged Zillow measure (the 12 month trailing average) vs CPI rents. I’ve also included
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