Housing behind inflation’s rise -- and fall

The cost of housing has risen relentlessly for about 18 months, according to U.S. government statistics, and now is one of the principal drivers of inflation. In October, higher housing prices accounted for over half of the 0.4% price increase from September. The good news? Signs suggest that the red-hot single-family home and apartment markets are cooling, which should bring down inflation in the coming months. This can be seen in real time data tracked by companies such as Zillow and Apartmentlist. The government’s gauge of housing prices includes both rents and a measure of home ownership costs. The rent measure covers all apartments, with most renters paying the same amount every month. The cost of new apartments soared last year, however, and some renters are paying more as they renew their leases. Now the price of new apartments is falling. It could take until next summer for those declines to flow into the government statistics, some economists estimate. While the trend will lower inflation, it won’t be enough by itself to bring it back to normal levels around 2%.