This Is Where America's Runaway Inflation Is Hiding

Tyler Durden's picture

The Census Bureau released its quarterly update on residential vacancies and homeownership for Q1 which is closely watched for its update of how many Americans own versus rent. It shows that following a modest pickup in the homeownership rate in the prior two quarters, US homeowners once again posted a substantial decline, sliding from 63.8% to 63.5%, and just 0.1% higher than the 50 year low reported in Q2 2015.

 

And perhaps logically, while homeownership continues to stagnate, the number of renters has continued to soar. In fact, in the first quarter, the number of renter occupied houses rose by precisely double the amount, or 360,000, as the number of owner occupied houses, which was a modest increase of 180,000. This brings the total number of renter houses to 42.85 million while the number of homeowners is virtually unchanged at 74.66 million.

A stark representation of the divergence between renters and owners can be seen in the chart below. It shows that over the past decade, virtually all the housing growth has come thanks to renters while the number of homeowners hasn't budged even a fraction and has in fact declined in absolute numbers. What is obvious is that around the time the housing bubble burst, many Americans appear to have lost faith in homeownership and decided to become renters instead.

 

An immediate consequence of the above is that as demand for rental units has soared, so have median asking rents, and sure enough, according to Census, in Q1  the median asking rent at the national level soared to an all time high $870.

 

Which brings us to the one chart showing where the "missing" runaway inflation in the US is hiding: if one shows the annual increase in asking rents, what one gets is the following stunning chart which shows that while rent inflation had been roughly in the 1-2% corridor for two decades, starting in 2013 something snapped, and rent inflation for some 43 million Americans has exploded and is currently printing at a blended four quarter average rate of just over 8%, the highest on record, and 4 times higher than Yellen's inflationary target.

So the next time Janet Yellen laments the collapse of inflation, feel free to show her this chart which even she can easily recreate using the government's own data (the sad reality is that rents are rising even faster than what the governmet repoirts) at the following link.

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NoDebt's picture

Fuck you, pay me.

Boris Alatovkrap's picture

Bankster and Ecommunist is use clever language.

Inflation ? Opposite of Deflation

Inflation is measure in market price of good and service, CPI specifically for what common citizenry is utilize

Deflation is measure of asset price, collateral and securitization for backing of casino bet of Bankster in exotic deravative between other Bankster.

Meh… but what is Boris know?

Vampyroteuthis infernalis's picture

I choose to rent now not because I have to, but because of the job market. When you are forced to find a new job every 3 to 4 years and you are in a 1 employer town, buying does not make sense. Yes, it sucks.

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) Vampyroteuthis infernalis Apr 28, 2016 12:32 PM

Damn, I'm stupid.  I haven't raised rents in four years, letting my tenants keep more of their money and all of that.  They're good people working hard to make ends meet...

 

Thanks for the tip, ZH!!!

pmbug's picture

Is Jimmy "The rent is too damn high" McMillan still around?

Never One Roach's picture

Don't forget Obama's oppressive mandated health care costs including the soaring premiums of Obama's Panels of Death:

 

Obamacare to blame for soaring drug costs: AEI

 

Small Businesses 'Getting Crushed' by Obamacare Costs: CEO

 

Obamacare Enrollees Are Reeling from High Deductibles

 

Major Study: Suicide Rates in the U.S. Are Soaring


"Yes we can!"

John Kich's picture

This is Donald Trump's most shocking statement yet,

However the mainstream media isn't saying a word about it?

http://legitorscamreview.com/the-final-bubble/

Jtrillian's picture

Most of it is hiding in the markets as this video shows:

https://youtu.be/QqOtSokKRxs?t=12m

Son of Loki's picture

Every promise made when Obamacare was being debated and passed has failed. Premiums have gone up, choice in doctors has gone down and access to care for many Americans has been reduced. Support across the country is dwindling as Americans continue to lose jobs, their insurance and face rising costs for fewer benefits and lower quality. I believe we will continue to see insurance cancellations, cost increases, reduced quality of health care, not to mention a poor system of determining who is truly eligible for subsidies. This is not the health reform that the American public was promised.

 

A full repeal of Obamacare is the best solution.

 

Rep Olson

D Nyle's picture

John Kich is a paid Hillery Troll

LaLiLuLeLo's picture

Here in wonderful Northern Virginia, we're getting kicked out of our apartments so that Chinese and Saudi investors can knock em down and build taller, more expensive 'luxury' appartments for the droves of slave-wage Indian IT workers being shipped in every month. Make Americans Slaves Again ©

ZD1's picture

 

 

Same thing is going on in the SF Bay Area on the left coast.

Backin2006's picture

Wall Street is desperate to get its grubby hands all over housing. It's the biggest household expenditure and the big pot of gold gleaming in the eyes of the banksters.

USA has more land per capita than most countries. It has the entrepreneurship to solve this problem. Instead - as with any other cartel - supply is being artificial squeezed. Property taxes can shut down a neighbourhood when the teaching unions start writing their own contracts.

Next, new entrants to the market will soon find it harder and harder to become landlords. House building will be made impossible by stupid regulation. And greedy builders cynically use planned obsolesence to keep the lucre swilling.

 

Ganja Jane's picture

Yes, he is: http://www.nydailynews.com/news/politics/rent-damn-high-jimmy-mcmillan-e...

It appears Deez Nuts think the rent is "Too Damn High!" as well. 

Haraklus's picture

My landlord hasn't raised my rent at all in the nearly 2 years I've lived in his place, despite the fact that local rents have gone up nearly 15%.  Swell guy.

I kind of wish he would raise our rent, though, because I have a poor roommate who is always spouting socialist bullshit that I wish would leave.

Osmium's picture

Super glue his bunghole shut.  That should do it.

unit472's picture

I wonder if this doesn't account for some of the growth in renting. A person can be both a landlord and a tenant. If you have to move for job related reasons and either cannot or do not want to sell your home unless you can afford two houses you are going to have to rent. Since job stability is much reduced these days many people maybe doing this.

BarkingCat's picture

Yes. I have people that rented a house 3 years ago. The moved from Arizona where they owned a house at the time.

They were renting out theirs while at the same time being tenants in mine.

...but I don't know if the sold their house or not. For all I know they were upside down and could not sell.

Jack's Raging Bile Duct's picture

Agreed. Both my career and personal preferences take me all over. No way am I getting tied down into a debt trap, constant liability, or potential boondoggle should the bubble burst inopportunely. I'll buy land and a build a house when I'm ready to die somewhere. I'll build it myself, and do it properly with quality for posterity. Fuck these 30 year burden of clapboard McMansions.

Oldwood's picture

You don't think you're in a debt trap now? Some of that national debt has got your # on it, and any savings are rotting away.

I bought my commercial building from my landlord in 01 and had it paid off in ten years. Now operate rent free and have equity. This is NOT dependent on inflation. Sure, property values have more than doubled, but that's not the point. If I had rented, I would STILL be renting at twice the price and have zero equity.

The Saint's picture
The Saint (not verified) Boris Alatovkrap Apr 28, 2016 12:19 PM

One thing about renting vs. owning - when you rent you are paying the interest and taxes on the property for the owner but you get a ZERO tax deduction.

Long term renting is for losers.

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) The Saint Apr 28, 2016 12:25 PM

Agreed.  If you set up the payments properly after 15 years you only have to pay rent (property tax) on the place that you "own" to the government - or be evicted.  Rent to the government is outrageous but it's less than rent to the government and the owner.

If you don't know where you'll be in a few years, rent, don't buy.

Ganja Jane's picture

What is the situs?  Real property is what corporations own...the people own PRIVATE property. Know the difference.

Graph's picture

1. Until property tax becomes major source of revenue for the place where you live.

2. Also, new generation need to be gerrila-like mobile, if needed to go where the the jobs are.

Oldwood's picture

How about instead of being dependent on a job, work to become self employed and buy a home and PAY for it, so eventually you have some liberty. I just don't understand WHY people are so content with dependency, yet bitch so much about it. If we keep blaming others for our own weaknesses, our own unwillingness to attempt MORE, we pretty much deserve what we get.

cornflakesdisease's picture

Not if you live in Houston and your house is now under water.  Glad I rent my spot for my RV.

sun tzu's picture

The same old realtor bullshit idiocy that was being spouted from 2004-2007 before millions of  "owners" lost their asses and ended up in bankruptcy or underwater on their mortgages. 

Buying into bubbles is for morons. 

Theonewhoknows's picture
Theonewhoknows (not verified) NoDebt Apr 28, 2016 12:36 PM

The important part here is still while knowing how everything is manipulated to make sure you are on the upside. That you with your knowledge make money to be independent and say whatever you want to say while they take savings from the middle-class and make everyone poorer. I think this guy made a good point when he compared different markets according to CAPE and other indicators. On top of that, he pointed to the cycle of capital transfers between developed markets and emerging ones. Worth watching. Especially second half. http://independenttrader.org/trader21-lecture-presented-at-fx-cuffs.html

RopeADope's picture

Don't ever point out interesting information found in .gov economic data.

Within a year they will alter the data series to disappear the interesting info.

chunga's picture

For fun, bring up Yellen and her worries about deflation while you're checking out at a grocery store. I've done this and I'm a little surprised how many regular, normal people want to rip her face off.

Also mention the word "fraud" and total strangers really put in their 2 cents.

Dave Whiteman's picture

In return for ripping us off. . .

richsob's picture

I hate the idea of never being able to truly avoid making paymnets on a house (the damn real estate taxes are there forever) but I would never rent again.  Either option is expensive in the long run but I love the freedom to tell anyone to get off my property if I don't want them there.  That's worth something.

buzzardsluck's picture

 

"I hate the idea of never being able to truly avoid making paymnets on a house (the damn yearly protection money to the local mafia are there forever)..."

 

FIFY also I didn't neg

richsob's picture

Thanks.  You said it better.

Curiously_Crazy's picture

Your rental system over there sounds just as scary as the gov extortion of property taxes most of your populace accepts as normal.

At least in Australia, and most European countries as well, you take out a rental for either 6 months or a year at a time. It becomes *yours* for that period and no one is allowed to step foot on it without at least 2 weeks notice and even then a MAX of once every three months and even then only to check you're looking after the place.

You guys are getting reemed up the arse more than you know.

But yeah I know - land of the free and all that!

Restorative_Ally's picture

We got low inflation on everything except houses, healthcare, food, cars. You know, shit that don't matter.

But at least electronics are cheap. iDoodles for everyone!

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) Restorative_Ally Apr 28, 2016 12:28 PM

FREE iDOODLES FOR EVERYBODY!!! - The Bern Feel

gatorengineer's picture

 the tagline on the story was deflation everywhere.  That tag line didnt make it into the story.  I dont see ANYTHING getting cheaper that I need.  My home price is crashing nicely, however....  If you think electronics are getting cheaper, have you bought a cell phone lately?

general ambivalent's picture

Fucking 80 dollars a month. I'll seek out the 5 pay phones left scattered around town instead.

reader2010's picture
"Present-day society is wholly based on the exploitation of the vast masses of the working class by a tiny minority of the population, the class of the landowners and that of the capitalists. It is a slave society, since the “free” workers, who all their life work for the capitalists, are “entitled” only to such means of subsistence as are essential for the maintenance of slaves who produce profit, for the safeguarding and perpetuation of capitalist slavery."

— Vladimir Lenin

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) reader2010 Apr 28, 2016 12:42 PM

Ahhhh... FREE GOVERNMENT RENT FOR EVERYBODY!!!!

That has worked out well in Cuba, Venezuela, et al, hasn't it? What a f*cked up system.  Government is your master.  And we ALL know that LaTousha down at Government People Control Office Number 27 always has the best in mind for you.  Now go stand in line for your bread.  But at least someone didn't make a profit on their effort to make bread that people might or miight not want to buy.

Tristan Ludlow's picture

Europe does the same thing.  So much so that there is not enough housing to go around.  The government makes a horrible landlord.

lakecity55's picture

A new report in the media says Free Bread Helmets for everyone! Yay!

Cruel Aid's picture

Diff in Lenin society vs ours is that you can start a business if you are inclined and break out of it, although not everyone is able to manage self determination. Life will never be fair or equal, thats just lip service.

Couldnt do that there. Huge difference.