The Coming Rise in Residential Inflation

28 Pages Posted: 28 Feb 2022 Last revised: 12 Jun 2023

See all articles by Marijn Bolhuis

Marijn Bolhuis

International Monetary Fund (IMF)

Judd Cramer

Independent Researcher

Larry Summers

Harvard University

Date Written: February 2022


We study how the recent run-up in housing and rental prices affects the outlook for inflation in the United States. Housing held down overall inflation in 2021. Despite record growth in private market-based measures of home prices and rents, government measured residential services inflation was only four percent for the twelve months ending in January 2022. After explaining the mechanical cause for this divergence, we estimate that, if past relationships hold, the residential inflation components of the CPI and PCE are likely to move close to seven percent during 2022. These findings imply that housing will make a significant contribution to overall inflation in 2022, ranging from one percentage point for headline PCE to 2.6 percentage points for core CPI. We expect residential inflation to remain elevated in 2023.

Suggested Citation

Bolhuis, Marijn and cramer, judd and Summers, Larry, The Coming Rise in Residential Inflation (February 2022). NBER Working Paper No. w29795, Available at SSRN:

Marijn Bolhuis (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Judd Cramer

Independent Researcher ( email )

Larry Summers

Harvard University ( email )

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