It’s like a game of Where’s Waldo? All the new in regards to inflation seems to be good. Yet do such reports reflect what is going on in your pocket book?
A recent Census Bureau quarterly update on residential vacancies and homeownership shows continued decline in home ownership.
No surprise then, that when people still have to live somewhere, if home ownership is going down, rental occupancy has to increase. Or in this case, soar.
A stark representation of the divergence between renters and owners can be seen in the chart below. It shows that over the past decade, virtually all the housing growth has come thanks to renters while the number of homeowners hasn’t budged even a fraction and has in fact declined in absolute numbers. What is obvious is that around the time the housing bubble burst, many Americans appear to have lost faith in homeownership and decided to become renters instead.
An immediate consequence of the above is that as demand for rental units has soared, so have rents, and sure enough, according to recent Census reports, the median asking rent at the national level soared to an all time high $870.
Which brings us to our Where’s Waldo moment where we find that missing inflation: Graphing the annual increase in asking rents as shown below reveals that while rent inflation had been roughly in the 1-2% corridor for two decades, starting in 2013 rent inflation for some 43 million Americans exploded and is currently running at an average rate of just over 8%, the highest on record.
This article was developed from This Is Where America’s Runaway Inflation Is Hiding by Tyler Durden on ZeroHedge.com.