Free Trial

Japanese MOF sells Y964.3bn 20-Year JGBs:


Japanese MOF sells Y4.7714tn 3-Month Bills:


PREVIEW: 20-Year JGB Supply Due


Coiling Ahead Of The Weekend

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access
MNI (Washington)

Owners' equivalent rent, which makes up 40% of core U.S. CPI, will likely double to 7% by December based on current single-family home rental price trends, CoreLogic chief economist Frank Nothaft told MNI on Tuesday.

That would keep core CPI elevated at around 4% by year-end if every other component fell back to 2%, he said. Alternatively, if one assumes all other components registered zero, core CPI would still be running just under 3% on the acceleration in the rent measure alone.

Because a typical lease lasts a year, only a sliver of the BLS's monthly sample of rent prices has seen a recent adjustment to market rental rates. A regression analysis found that the rental price figure known as OER lags CoreLogic's single-family rent index by about 12 months.

"The OER data will adjust but very gradually," Nothaft said.


"Given we found that single-family rents were up 11.5% in the latest month, three times faster than OER has increased over the past 12 months, we project the growth rate of OER is going to continue rising and peak at a 7% annual rise by the end of 2022," he said.

That will keep some upward pressure on core CPI, which came in at 5.5% in December. "Core CPI will be slowing this year even with the 7% projection we have for rent, but it will remain elevated. It’s clearly above the Fed's 2% target," Nothaft said.

The FOMC's December projection called for its preferred price measure, core PCE inflation, to slow to 2.7% this year from 4.4% in 2021.

Over the coming year, Nothaft does expect some moderation of single-family rents.

Investors buying up single-family homes in the past several months will bring some new supply in the rental stock and slow some of the pressure on rent growth. And if Covid-19 infection rates continue to wane, tenant families are also more likely to return to apartment buildings.

MNI Washington Bureau | +1 202-371-2121 |
MNI Washington Bureau | +1 202-371-2121 |

To read the full story

Why Subscribe to

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.