The rental surge of 2021-22 was quite spectacular,

 with rents rising at double-digit rates for about a year and a half. But it has leveled off recently. 

In fact, Zillow’s index have been signaling rent declines for two or three months. This is good news for renters. It’s also, potentially, good news for the fight against inflation.

Actual rents plus these “imputed” rents account for more than 30 percent of the Consumer Price Index, and almost 40 percent of the so-called core index, which excludes food and energy.

So rising rents have been a major factor in stubbornly high inflation, which led many economists (again, myself included) to retreat from the view that inflation was transitory.

I don’t want to overstate the bottleneck story. We probably do, in fact, have an overheated economy, which would have inflation problems even in the absence of bottlenecks in specific areas. But a larger amount of recent inflation now looks more transitory than many economists were arguing even a few months ago.

But here’s the thing: Easing rent inflation hasn’t yet begun to show up in official price statistic

Paul Krugman NYT 22 Novenber 2022