May marked the third straight month for inflation above an 8% rate and was the largest year-over-year gain since December 1981, according to the NAHB. The NAHB forecasts that the persistent inflation is likely to push the Federal Reserve to continue tightening monetary policy and raise rates “at an accelerated pace.”

The Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) rose by 1.0% in May on a seasonally adjusted basis, following an increase of 0.3% in April. Excluding the volatile food and energy components, the “core” CPI increased by 0.6% in May, the same increase as in April.

In May, the indexes for gasoline, shelter, and food were the largest contributors to the increase in the headline CPI.

The index for shelter, which makes up more than 40% of the “core” CPI, rose by 0.6% in May. The indexes for owners’ equivalent rent (OER) and rent of primary residence (RPR) both increased by 0.6% over the month.

NAHB constructs a “real” rent index to indicate whether inflation in rents is faster or slower than overall inflation. It provides insight into the supply and demand conditions for rental housing. When inflation in rents is rising faster (slower) than overall inflation, the real rent index rises (declines). The real rent index is calculated by dividing the price index for rent by the core CPI (to exclude the volatile food and energy components). The Real Rent Index remained unchanged in May. Over the first five months of 2022, the monthly change of the Real Rent Index stayed virtually unchanged, on average.