Below is a chart and brief excerpt from today's Early Look written by Macro analyst Christian Drake.
So, landlord expectations around rent collection – which is directly impacted by pandemic related eviction/rent moratoria - carries through to directly impact the calculation of reported shelter/rent inflation.
The eviction moratorium (along with migration outflow from high priced urban apartments) is clearly flowing through to rent collections and reported housing inflation.
What you are likely to see – and we’ll work to tighten up the timing estimate on this – is a hard reversal in Shelter/Owner’s Occupied Rent Inflation, which will have an immediate and meaningful impact on reported Headline Inflation. If the OER reconverges to the trend in single-family home price growth, the acceleration could come with some measure of sticker shock.
And you don’t have to take my word for it. Just ask renters (see Chart of the Day below). They think rent price inflation is coming. Probably just believe them.
More broadly, prevailing demand-supply imbalances (housing, Goods economy at large) are real and acute and supply chain issues may not resolve in benignly.