Housing inflation is slowing
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The surge in the cost of putting a roof over one's head is losing steam.
Why it matters: Shelter costs are the biggest component of the Consumer Price Index, the most widely used gauge of inflation in the U.S.
The big picture: Shelter inflation still rose at an uncomfortably high 6.5% over the last year, according to November CPI data out Tuesday.
- That means shelter costs were responsible for nearly 70% of the 4% annual rise in core CPI — that is, excluding food and energy.
Yes, but: Since peaking in March, shelter inflation is clearly slowing.
Be smart: Shelter inflation tends to move in longer pronounced trends, analysts say. And the current downtrend is one of the reasons economists expect inflation to continue slowing down.
The bottom line: All this is cold comfort for people who actually need housing, which is everyone.
- Over the last four years, shelter costs have risen roughly 21%.
- Americans haven't seen a comparable rise since the early 1990s.
