L.A.-OC sees top surge since 1980
The federal government's key cost-of-living measurement says tenants — in California and across the nation — are seeing jumps in rent inflation in early started 2022 that were last seen decades ago.
My trusty spreadsheet analyzed the lengthy history of the “rent of primary residence” slice of the inflationtracking consumer price index for three big California metropolitan areas and the nation. The key metric? How fast rent inflation changed in a year's time — or the increase in the increase.
The CPI's extended track record for rent allows us to put rising housing expenses into a long-term perspective.
Consider: National rent inflation's one-year jump was the largest since 1948.
Also: San Diego's rent spurt was last bigger back in 1968. And Los Angeles and Orange counties haven't seen a rent hike surge like 2022's since 1980.
To the north, San Francisco's rent increase was not historically noteworthy other than it did mark the first yearly increase in six years.
Details
In Los Angeles and Orange counties, the CPI says the cost of renting in 2022's first four months is up 3.43% in a year. In 2021, rent inflation ran 1.24%.
That 2.2 percentage point jump in what tenants pay — if it continues the rest of the year — would be the biggest surge in 42 years.
Nationally, consumers are paying 4.3% more for rent this year — that's 2.07 percentage points higher inflation than last year's 2.23% hike.
In San Diego, consumers are paying 5.1% more for rent this year — a 2.9 percentage point swift uptick vs. last year's rent inflation pace.
Then there's San Francisco, where rents have stagnated as many residents chose to live elsewhere before and during the pandemic. That means Bay Area consumers are paying just 0.33% more for rent so far in 2022 — but that's their first increase since 2016.
Bottom line
These are significant hits to consumer wallets caused, in part, by what we've seen across the economy: “too much good stuff.”
The finances of many renters continued to improve this year as the pandemic economy's surprisingly robust recovery meant more folks could afford to move out of crowded situations and/or pay up for an apartment.
The CPI rent index is a
slow-moving metric reflecting what a broad base of consumers are paying landlords in all kinds of living arrangements. These leaps in rent inflation strongly suggest housing costs will be an even bigger financial headache for many folks for the foreseeable future.