Okay, maybe rent-flation isn’t 100% incorporated into the Boston real estate vernacular, but perhaps it should.
Rising apartment rents contributed to high inflation in August as both national and local real estate investors are increasingly looked toward apartment buildings to generate cash flow.
The annualized cost of renting a typical apartment jumped 6.7 percent in August, up from 6.1 percent in July, according to figures released Tuesday by the Labor Department.
The surging cost of apartments and homes accounted for about 40 percent of last month’s cost of living increase, excluding energy, which fell in price, and food, which increased slightly.
The growth of so-called core inflation, which includes housing costs but not energy or food, rose at an annual rate of 6.3 percent in August, up from 5.9 percent in both June and July.
It would appear so, today’s economic report drove down the Dow Jones Industrial Average more than 1,200 points and the Nasdaq Composite Index down 5.2 percent at the closing bell, as sustained inflation increased the likelihood that the Federal Reserve would continue raising interest rates.
Housing markets in the U.S. can expect a boost in apartment construction, which can’t come soon enough given surging demand and rising apartment rents.