U.S. Housing Inflation: Stubbornly High to Stubbornly Low
Feb 12, 2026
A lively look at what drove the pandemic housing surge and why home prices have cooled. Short-term dynamics like new-lease rent spikes versus renewals are explored. The conversation highlights how immigration and affordability shifts keep rental inflation elevated. Forecasts suggest rents may drop below pre-COVID norms, with consequences for broader inflation and monetary policy.
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Pandemic Surge Drove Rapid Home And Rent Gains
Pandemic-era demand plus underbuilding drove home prices to ~20% annual gains in many metros.
Rent inflation followed with about a 12-month lag as new-lease rents rose in line with home prices.
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Move Rates Slow Overall Rent Adjustments
Only about 20% of renters move each year, so new-lease rent spikes hit a minority immediately.
Renewal rents adjust slowly, taking roughly four years to catch up and keeping OER elevated longer.
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Immigration Added Rental Demand
Humanitarian immigration from 2022–2024 increased rental demand because new households relied on rentals.
This influx was an additional factor keeping rental inflation stubbornly high.
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In this episode, we discuss the outlook for U.S. housing prices.
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