Economists' Outlook

Housing stats and analysis from NAR's research experts.

Instant Reaction: Consumer Price Index, September 14, 2021

"It seems that inflation is slowly cooling off, confirming the Fed's view that high inflation will be temporary. Inflation continued to rise quickly in August, but less than the previous couple of months. Over the last 12 months consumer prices rose 5.3% compared to 5.4% in both July and June. Meanwhile, economists and policymakers typically pay close attention to core inflation, which excludes volatile food and energy prices. In August, core inflation retreated to 4.0% from 4.3% in July. It's also worth mentioning that core inflation increased by 0.1% from July which is the smallest month-to-month increase since February 2021.

With most children and students back in the classrooms, airline fares, used cars and trucks, and motor vehicle insurance all declined over the month. Remember that these were some of the expenditures that boosted inflation during June and July. In contrast, rent prices are picking up. In August, rent and owners' equivalent rent both climbed 0.3% from July. We have noted previously that rent prices will increase in the following months. Record high home prices (not included in the CPI) hurts affordability, delaying the transition to homeownership for many renters. While rental vacancies are falling, this translates to a higher rental demand which is expected to push up rent prices."