Do you have any thoughts on how rent inflation making up such a large portion of inflation could impact the fed’s interest rate? My understanding is that a higher interest rate has a more complex relationship on mid-long term rental prices since higher interest rates discourage new building, decreasing supply.
Been meaning to write something about this broad topic soon, but yes I think it's pretty clear that multifamily construction has been hit pretty hard by rising interest rates. So far we haven't really seen the supply impacts of that in prices within rental markets (a lot of the multifamily housing units coming online now are ones that broke ground in 2021/2022) but I think it is something that will become more of a pain point over the next couple years as the lower starts translate into a period of lower completions.
If the error bars for the new method are wider, which they are, is it really giving us good enough information on which to make policy? or predictions of how things are going to evolve going forward?
I hope you are right.
Do you have any thoughts on how rent inflation making up such a large portion of inflation could impact the fed’s interest rate? My understanding is that a higher interest rate has a more complex relationship on mid-long term rental prices since higher interest rates discourage new building, decreasing supply.
Been meaning to write something about this broad topic soon, but yes I think it's pretty clear that multifamily construction has been hit pretty hard by rising interest rates. So far we haven't really seen the supply impacts of that in prices within rental markets (a lot of the multifamily housing units coming online now are ones that broke ground in 2021/2022) but I think it is something that will become more of a pain point over the next couple years as the lower starts translate into a period of lower completions.
Everybody needs a place to live, so rent and home prices are a big factor in all of this, which seem to be ignored all too often in the big picture.
Turns out be a really good call. I expect inflation to drop even lower from here.
If the error bars for the new method are wider, which they are, is it really giving us good enough information on which to make policy? or predictions of how things are going to evolve going forward?