Shelter Shock: Rents Kept Climbing Rapidly in May

Despite cooler overall inflation in May, shelter prices continued to climb at a rapid pace, according to government data released Monday.

The consumer price index for rents rose 0.4 percent for the second month in a row in May. Compared with a year earlier, the rent index is up 5.3 percent.

A measure called owners’ equivalent of rent, which aims to measure the cost of housing for homeowners, was also up 0.4 percent for the month. It is up 5.7 percent compared with May of last year.

The rapid rise in home prices and rents in a higher interest rate environment has been unusual and a source of the public’s unhappiness with inflation and the Biden administration’s economic policies. A recent survey from Gallup found that only 38 percent of Americans are confident that President Biden’s policies will be right for the U.S. economy.

There was progress on other politically salient areas of inflation. Energy prices fell two percent in May, including a 3.6 percent decline in gasoline prices. Grocery prices were flat for the month.