Patrick Harker, Essay: Unpacking Shelter Inflation

“In fact, shelter inflation, as it is known, is a major driver of the far-too-high inflation plaguing our country. Housing represents about a third of the value of the baskets of goods that the Bureau of Labor Statistics (BLS) examines when preparing the Consumer Price Index. For renters, shelter inflation measures both rent and utility payments. For homeowners, the BLS calculates what it would cost to rent a similar house. Inflation in other sectors of the economy are also drivers of inflation; if the cost of commodities like lumber rises, so does the cost of building a home. It’s a feedback loop.”

“Of course, inflation is far too high across most goods and services in our economy. But I find shelter inflation, along with food inflation, particularly alarming. Food and shelter are quite literally essential; it’s no wonder they are considered the most basic category on Maslow’s hierarchy of needs. We must do everything we can to get shelter inflation under control.”