Renters are being hit harder by inflation than homeowners

Renters and homeowners experience inflation differently, and right now renters are taking a much more painful hit.

Renters and homeowners experience inflation differently, and right now renters are taking a much more painful hit. Consumer Price Index data released Thursday showed that inflation was at 3.4% in December. It was the highest level since September and a jump from November’s 3.1% reading. “The December inflation report provides a stark reminder that getting inflation down those last couple of percentage points is not going to be easy,” Lisa Sturtevant, chief economist at Bright MLS, a multiple listing service covering six mid-Atlantic state and the District of Columbia, said in a statement. But what was notable about December’s data was that while there was strong consumer spending over the traditional winter holidays, propping up prices in some segments of the economy, housing continues to play an outsized role in keeping inflation above the Federal Reserve’s target, she said. While shelter inflation has come down over the past few months, in December, the shelter index was still 6.2% higher year over year. That increase accounted for two-thirds of the total rise in the price index excluding food and energy. While shelter costs are down from their 8.2% peak in March 2023, they likely need to fall to roughly 3.5% for inflation to come in consistently on target, Danielle Hale, chief economist for Realtor.com said in a statement.