CPI: Shelter is mostly rent of primary residence and owner's equivalent rent.
But yes, entirely vacant units aren't counted in the NTRR/ATRR or CPI, but this is the point. If the composition of vacant units changes you can have a downstream change in NTRR. For an extreme example, imagine that the pandemic caused everyone to move out of Ne…
CPI: Shelter is mostly rent of primary residence and owner's equivalent rent.
But yes, entirely vacant units aren't counted in the NTRR/ATRR or CPI, but this is the point. If the composition of vacant units changes you can have a downstream change in NTRR. For an extreme example, imagine that the pandemic caused everyone to move out of New York and into the New Jersey suburbs in 2020—the NTRR would only be capturing rent changes in New Jersey, because there were no new leases signed in New York. Changes in vacancy rates and the composition of new leases can then cause the indices to diverge.
CPI: Shelter is mostly rent of primary residence and owner's equivalent rent.
But yes, entirely vacant units aren't counted in the NTRR/ATRR or CPI, but this is the point. If the composition of vacant units changes you can have a downstream change in NTRR. For an extreme example, imagine that the pandemic caused everyone to move out of New York and into the New Jersey suburbs in 2020—the NTRR would only be capturing rent changes in New Jersey, because there were no new leases signed in New York. Changes in vacancy rates and the composition of new leases can then cause the indices to diverge.
That makes sense. Thanks for the replies 😄
Of course! Happy to help