The latest Consumer Price Index (CPI) showed that housing inflation picked up in January on a monthly basis, reversing the easing trend seen in the previous month.
Data from the Bureau of Labor Statistics showed shelter costs rose 0.4% in January compared to the previous month and higher than December’s 0.3% monthly increase. On an annual basis, prices rose 4.4% from a year earlier in January, slower than the 4.6% in December and the smallest 12-month increase since January 2022.
“As we saw through 2024, shelter inflation will continue to take time to get back to reasonable levels," Josh Hirt, Vanguard senior US economist, said in an email after the release.
The rent index rose 0.3% in January, matching December’s pace of 0.3%. Meanwhile, prices for owners' equivalent rent increased 0.3% for the month, unchanged from January’s 0.3% gain. Owners' equivalent rent is the estimated rent a homeowner would pay if they were renting their own property.
Meanwhile the lodging away from home index rose 1.4% in January after falling 0.5% in December, and household insurance accelerated 1.1% last month.
“We continue to hold the view that shelter inflation will eventually moderate over the course of 2025,” Hirt added.
