A metric assembled by personnel at the Federal Reserve Bank of Cleveland and the Labor Department shows the rate of inflation seen for the costs of new rentals significantly dropping.
Per numbers reported in Bloomberg, the average one-year price increase reached just under 12 percent in this metric at the end of June of this year. Like with inflation numbers reported elsewhere by the Commerce and Labor Departments, the one-year price increase represents how much higher prices are than the same month from the year prior. For the calculations of rental costs, the New Tenant Repeat Rent index — that new metric — seemingly spotlights rent expenses rather than move-in costs more generally. At the end of September, index data showed the one-year rate of increase reaching an even six percent, which was just below the figure produced by the same team averaging the one-year rate of increase in rents for all tenants. On September 30, that was 6.4 percent.
The developments suggest other federal metrics will soon show a drop in housing costs. “The researchers found that their new-tenant data tends to run ahead of BLS housing measures in the consumer price index by about one year,” per Bloomberg. It takes some time for the broader market as captured by previously used inflation measurements to more effectively reflect conditions seen for newly established rentals.
The drop in prices for new housing mirrors other falls in price like for gas, which on Monday was below the averages seen for a gallon of regular gas a week ago, a month ago, and a year ago. Biden released portions of the Strategic Petroleum Reserve, helping boost domestic supplies and get around the rise in costs. The Biden administration was also involved in industry discussions cited by Transportation Secretary Pete Buttigieg as part of the push to undo delays in supply chains.
Some of those efforts are showing up in real-world figures. Average quoted prices for moving a single shipping container from an Asian port to the West Coast of the U.S. are down to about $100 below the average level seen in 2019, just before the COVID-19 pandemic upended the domestic and global economy, The Wall Street Journal said. The average rate now is $1,400 — last year, that figure reached the obviously much higher $15,000, which clearly constitutes a major turnaround. Delays at a major port complex in southern California serving the Los Angeles and Long Beach areas — through which 40 percent of containers shipped to the U.S. are brought — are also down, including in terms of average numbers of ships waiting to unload and the time those ships wait for action.
One plan touted by the Biden administration late last year with the involvement of a White House task force dedicated to the issue involved expanding work at night. Samsung, for instance, pledged a 90-day stint of 24/7 operations dedicated to moving shipping containers from the ports.
