by Calculated Risk on 6/27/2025 08:55:00 AM

Here is a graph of the year-over-year change in shelter from the CPI report and housing from the PCE report this morning, both through May 2025.

CPI Shelter was up 3.9% year-over-year in May, down from 4.0% in April, and down from the cycle peak of 8.2% in March 2023.

Housing (PCE) was up 4.1% YoY in May, down from 4.2% in April and down from the cycle peak of 8.3% in April 2023.

Since asking rents are mostly flat year-over-year, these measures will slowly continue to decline over the next year as rents for existing tenants continue to increase.

The second graph shows PCE prices, Core PCE prices and Core ex-housing over the last 3 months (annualized):

Key measures are below the Fed's target on a 3-month basis. 

3-month annualized change:

PCE Price Index: 1.1%
Core PCE Prices: 1.7%
Core minus Housing: 1.1%

There appears to be some residual seasonality, especially in Q1.

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