Notes

Rental costs have increased dramatically
For more than a decade, rental costs consistently have gone up faster than the costs of owning a house. Figure 3 shows yearly rental price inflation and the equivalent inflation measure for homeowners. Since late 2006, when the housing bubble started to burst, through January 2021, rents have gone up faster than prices for homeowners. Early on in that period, both rents and house prices rose modestly as the country grappled with the fallout from the housing crisis. However, housing costs for both homeowners and renters have gained steam since mid-2010. Moreover, rents and homeowners’ costs quickly shot up again after a drop at the start of the pandemic in early 2020. (see Figure 3) The recent rise in rental inflation is thus largely a return to and even an exacerbation of the pre-pandemic situation, as the pre-pandemic levels of housing supply did not meet the needs of many low-income renters.