There’s a seemingly endless stream of new metrics being used to assess the multifamily market during its current run as the preferred real estate investment class. Let’s take a closer look at Consumer Price Index (CPI). One economic tool which has stood the test of time is the shelter component of the Consumer Price Index (CPI). Provided by the U.S. Bureau of Labor Statistics (BLS),  the shelter index is a measure of the costs associated with housing, not including investments and upgrades. It’s a major component of CPI — making up 32.8% of total CPI — and has been included since its inception in 1913. The two main components of the shelter index are the owners’ equivalent rent of primary residence (23.8% of CPI) and rent of primary residence (5.9% of CPI). The cost of shelter for renter-occupied housing is rent, while owners’ equivalent rent measures homeowners’ expected rent if they were renting their homes in the current market. The majority of the rest of the shelter index is made up of lodging away from home expenditures, such as housing at … Continue reading How does Rent Factor into the Consumer Price Index (CPI)?