[dcolkitt]

One thing to keep in mind is that the way the BLS measures shelter inflation is known to be extremely laggy. And shelter makes up 34% of the basket. High frequency metrics of shelter costs (like new leases or Zillow's metrics) show that housing is currently deflationary (i.e. below zero).

However the CPI metrics is still reporting shelter inflation at 8.0% YoY and a 9.6% annualized rate MoM. Within the next few months we should see a very notable decline in the shelter component of inflation as it heads towards zero. The reality is because of this lagginess, "true inflation" this time last year was probably closer to 12%+, and as of the last few months is probably closer to 3%.

[1980phipsi]

But there are good reasons for CPI to measure all leases and not just new leases. It depends on what your goal is of your measurement. If your goal is to measure the prices of a basket of goods representative of what urban consumers are spending money on, then measuring the prices of all leases is better than new leases.

I would agree that a good forecast of inflation would incorporate what is happening with leases now, but I would disagree that this means anything for "true inflation".

[BobbyJo]

I think most people see inflation as the change in cost to transact today vs some previous moment, as opposed to the change in broader prices paid, since a majority of the items normally talked about in the media are perishable/consumables like food and energy.

[coffeebeqn]

I sure hope that makes its way to real rents by the time it’s time to renew. I’d love to hardball for the first time in 10 years and demand a lower rent instead of it slowly and sometimes fastly creeping up every year