Here wut they (FED) don't tell ya(OER) Owners Equivalent Rent is a survey-FED calls random peeps and asks them wut they think they can rent house for and that forms the basis for OER and it lags by 5 months (they tell you that in this article d'oh)
Don't Tell Powell, But US Rents Just Tumbled The Most On Record As Economy Craters
There was a remarkable moment during today's Jay Powell post-FOMC presser, which revealed once again just how out of touch the Fed is when it comes to correctly evaluating the broader economy. Asked about the ongoing devastation in the housing market in general, and rent inflation in particular, Powell's response was the following:
*POWELL: POINT AT WHICH RENT INFLATION SLOWS IS STILL FAR AWAY
*POWELL: AT SOME POINT YOU'LL SEE RENTS COMING DOW
Here, Powell is doing two things; i) he is referring to the latest shelter/OER (owner equivalent rent) inflation data as reported by the CPI and which is indeed soaringand ii) is dead wrong by making the exact same mistake that so many economists made last year when they did not realize just how high rent inflation will soar as it tracks real-time rental metrics. (so they din't 'see it' start to increase until 5 months AFTER it did-and it's STILL a survey) What about the actual state of rents? For the answer we go to the latest monthly report from Apartment List which we have used consistently since early 2021, and where we find something stunning: rents just tumbled by the most on record!
As the AL blog writes in its latest monthly note, "the national index fell by 0.7 percent over the course of October, marking the second straight month-over-month decline,and the largest single month dip in the history of our index-(again not be be 'seen by the FED until MUCH later), going back to 2017." These past two months have marked a rapid cooldown in the market, but the timing of that cooldown is consistent with a seasonal trend that was typical in pre-pandemic years. Going forward it is likely that rents will continue falling in the coming months as we enter the winter slow season for the rental market. Despite the monthly decline, rent growth over the course of this year continues to outpace the pre-pandemic trend, even as it has slowed significantly from last year’s peaks. So far in 2022 rents are up by a total of 5.9 percent, compared to a record 18 percent at this point in 2021. Year-over-year growth has decelerated rapidly since the start of the year, but it’s still likely that 2022 will end up being the second fastest year of rent growth since the start of our estimates.
The cooldown in rent growth is being mirrored by continued easing on the supply side of the market. Our vacancy index now stands at 5.5 percent, after a full year of gradual increases from a low of 4.1 percent last fall. In the past two months, this easing of the vacancy rate has picked up steam again, after plateauing a bit over the summer. That said, today’s vacancy rate remains below the pre-pandemic norm.
The recent slowdown has been geographically widespread. Rents decreased this month in 89 of the nation’s 100 largest cities in October. (even Johns Hopkins can do DHAT maff) Boise, ID – one of the first rental markets to explode in the early phases of the pandemic – saw the sharpest rent decline among the nation’s 100 largest cities this month (-3.5 percent). At the metro level, we are continuing to see an ongoing cooldown in many of the recently booming Sun Belt markets. Las Vegas, Phoenix, Jacksonville, and Riverside have all seen rent growth of more than 30 percent since March 2020, but none of these metros has seen rents increase by more than 2 percent over the past twelve months.
But here is where dis article gets it wrong about the FED in a few months
Translation: we are not only two months away from rents not only sliding a record-tying 4 months in a row, but we are also two months away from rent inflation turning flat (or negative) on the year. And the paradox: in two months is precisely when the (6-9 month delayed) OER inflation will peak and the Fed will be hiking with gusto (ummmm…no they won't, don't you read tea leaves brehs?-you should try it..and you neber mention the derivatives either) and signaling that the market the terminal rate is 5% or more.
https://www.zerohedge.com/economics/dont-tell-powell-us-rents-just-tumbled-most-record-economy-craters
Yes the same "signalling" that said inflation was transitory but continue to ignore the $166T lb gorilla in the room that will have you shutting this shit down when you get a panic seller
Oh and regarding the REIT (Real-Estate Investment Trust(s) market-yeah good luck on that one too-they kept that propped after the 2008 mkt crash and rents din't really go down while stores were left empty… but they din't habs 40% of renters (retail) NOT paying rent either so if you habs anything REIT related in yer investments I'd take a good hard look at that
Nearly 40% of small business owners couldn’t pay rent in October
https://fism.tv/poll-nearly-40-of-small-business-owners-couldnt-pay-rent-in-october/