BiggerPockets Money Podcast · Friday, October 2, 2026
Jay Scott discusses shelter inflation, noting that it reflects existing leases rather than new ones. He explains that real wage growth, while positive, may not be sufficient to drive rental housing income as high as historical averages, impacting the housing market and its relation to inflation.
“Shelter inflation is about 3.4% year over year, which is higher than the Fed's 2% target. That's because shelter inflation talks about the existing leases in place, right? Not the net new leases that are being signed today for the consumption that's calculated inside the CPI index.”
“Real median wages were around 360 per week. Today, they're closer to 380. So what is that? That's about a 5%. That's maybe a 5.1% increase over four years. Now, obviously, compounding changes things a little bit, but you divide that 5.1% by four years, and basically, we're seeing about a 1.2%, 1.3% real wage growth per year.”
“Historically, we've seen 2% to 3% rental growth in housing per year. So yes, people are making more money, but not necessarily enough money to continue to push rental housing income up as much as it's historically over the last 40, 50, 60 years.”