After steadily increasing, year-over-year shelter inflation has moved down for four consecutive months, from 8.2% in March to 7.7% in July. “Our baseline forecast suggests that year-over-year shelter inflation will continue to slow through late 2024 and may even turn negative by mid-2024,” the researchers wrote. Total inflation will go down when shelter inflation dropsCurrently, there is a disconnect between shelter inflation, which has remained higher, and other components of inflation that have fallen. For renters, shelter inflation includes rent and utility payments. The researchers at the San Francisco Fed crafted models combining several measures of local shelter and rent inflation to help explain how recent trends might affect the path of future shelter inflation.

Source: CNN August 11, 2023 00:56 UTC