Sunday, February 26, 2012

Are Rents Rising?

Dean Baker has a good put down of an article in the New York Times that tries to claim there is a shortage of rental housing. The one piece of economic data that the Times presented was:

rents have been rising, up 2.4 percent in January from a year earlier, according to recent data, not adjusted for inflation

A nominal price increase over one year doesn’t sound that convincing. How hard would it have been to present matters adjusted for inflation? Dean presents a graph that takes the increase in owner equivalent rent over the 1991 to current period. It appears that there was no nominal increase in the previous year. Compare this to the 2.9% increase in the consumer price index over the past 12 months and the 1.6% increase over the previous year and a some elementary arithmetic indicates real rents have fallen over the past couple of years. And yet the Times claims that rents have been rising due to some alleged shortage?

1 comment:

Structuredsettlement said...

“It is essential, therefore, that State support for rents are kept under review, reflect current market conditions and do not distort the market in a way that could increase rent prices for others, such as low-paid workers and students.”

Daft.ieeconomist Ronan Lyons said a direct link between the reduction in the number of properties available for rent and the failure of rents to fall could not be made. “It’s not really a case of cause and effect; the fall in the number of properties to rent has mainly been in Dublin and to some extent the other cities, but supply is much the same in the rest of the country.”sell structured settlement