As Consumer Price Index Declines, the ‘Real’ Rent Index Increases

The Consumer Price Index (CPI) declined in March by <-.01%>, the first such decline in the CPI since 2010, and is related to the negative impact of the COVID-19 virus on consumer demand. However, the ‘real’ rent index, which is constructed by the National Association of Home Builders (NAHB), which indicates whether inflation in rents is growing faster or slower than overall inflation, increased by 0.4% over February’s reading. This after growing by approximately 0.1% per month for the previous 6 months. The annual growth rate of the real rent index grew to 5% in March, after 3 months of staying in the 1% range.