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Price of shelter increased 4.1% — or was it more?

The latest US consumer price index report was recently published and for the 12-month period ending December 2021, the all items index rose 7.0%. This is the largest 12-month increase since June 1982. Here’s a breakdown:

  • Gasoline (all types): +49.6%
  • Used cars and truck: +37.3%
  • Meats/fish/poultry/eggs: +12.5%
  • New cars: +11.8%
  • Food at home: +6.5%
  • Electricity: +6.3%
  • Food away from home: +6.0%
  • Apparel: +5.8%
  • Transportation: +4.2%
  • Shelter: +4.1%

The obvious standouts here are the price of gasoline and the price of used cars and trucks. Too much demand and not enough supply, it would seem. But the other conspicuous line item for me is shelter at only 4.1%. Is that it?

As Charlie Bilello points out in his latest newsletter, US rents were estimated to be up about 17.8% in 2021 (the highest increase on record according to Apartment List) and the Case-Shiller US National Home Price Index was similarly up about 19% year-over-year.

I also just glanced at the latest Urbanation rental report that came out today, and condominium rents were up 10.8% year-over-year here in the Greater Toronto Area. So I don’t know about this 4.1% number. But maybe I just missed something in the fine print.


  1. Mathew Lausberg

    Two potential reasons why are, 1., that the rental rates we see from groups like Urbanation are on transacted units, so it excludes all the renters that don’t move and just pay the guideline rental increase (e.g. 1.2% in Ontario). 2., is that in the US at least, not sure about Canada, 73% of the shelter figure comes from OER (Owner’s equivalent rent). So the survey asks homeowners what they would rent their house for, which is an approach that has many flaws, especially with rapidly rising house prices. I just picture an 80 year-old who has lived in their house their whole life trying to come up with an accurate rental figure for their house. NOT happening!

    My two cents. Great blog!

    Click to access owners-equivalent-rent-and-rent.pdf

    Liked by 1 person

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