Ian Patrick, FISM News
While the housing market has shown signs that it may be slightly cooling, the cost of renting remains red-hot.
According to the U.S. Bureau and Labor Statistics (BLS) latest Consumer Price Index (CPI) report for March 2023, shelter proved to be “the largest contributor to the monthly all items increase.”
“The shelter index increased 0.6 percent over the month after rising 0.8 percent in February,” the report reads. “The shelter index was the dominant factor in the monthly increase in the index for all items less food and energy.”
Year-to-date rent prices have increased by 8.2%, far outpacing the general increase in inflation within the same time period at 5%. This is in stark contrast to food-at-home prices, a notoriously stubborn post-pandemic cost that actually decreased in March 2023 for the first time since September 2020.
High prices in shelter costs have been a burden for renters for many months and especially since the pandemic began.
The government had attempted to help with forbearance and foreclosure relief, while the CDC implemented an eviction ban as renters struggled to pay what they owed.
This eviction ban caused stress for landlords, who petitioned courts to overturn the moratorium. It went all the way to the Supreme Court, which denied to hear the case but still said the CDC was overreaching in its jurisdiction.
But Census Bureau data released in late 2022 showed that over half of renters were spending at least 30 percent of their income on housing costs, showing no real positive change to the issue.
In addition, renters who were paying at least half of their income on housing costs also increased to 26% according to the same Census Bureau report.
The issue seems exacerbated by the increasing price of housing as well. According to the National Multifamily Housing Council, “the median sales price of existing homes in the U.S. grew nearly 50 percent (49.4 percent)” from December 2019 to June 2022.
The Council says that the current monthly cost of home ownership represents “the highest buy-to-rent premium (on an inflation-adjusted basis) since the third quarter of 2006 (the peak of the housing bubble).”