Moderate Rise for CPI in November

The Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) rose in November and the pace of headline consumer inflation slowed in November from 4.37% to 2.43%.

The CPI rose at a seasonally adjusted annual rate of 2.43%, slowing from 4.37% in October. Excluding the volatile food and energy components, “core” CPI rose at a seasonally adjusted annual rate of 1.83% after rising 1.80% in October. The price index for a broad set of energy sources continued to rise in November at a seasonally adjusted annual rate of 15.31%. The increase in energy prices contributed to the rise in the overall prices.

NAHB constructs a “real” rent index to indicate whether inflation in rents is faster or slower than overall inflation. It provides insight into the supply and demand conditions for rental housing. When inflation in rents is rising faster (slower) than overall inflation, the real rent index rises (declines). The real rent index is calculated by dividing the price index for rent by the core CPI (to exclude the volatile food and energy components).

After declines during the recession, inflation in real rents accelerated from 2012 to 2014, a period of strong recovery in the multifamily sector, reaching a peak average annual rate of 1.7% in 2014. Real rent inflation has hovered in a very narrow range in 2015 and 2016.


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