Inflation is cooling slightly, but rents in Houston remain stubbornly high

Inflation is cooling slightly, but rents in Houston remain stubbornly high
Inflation is cooling slightly, but rents in Houston remain stubbornly high

Inflation cooled slightly in February, giving the US economy a dash of good news during a week in which two bank failures rattled investors and consumers alike.

The consumer price index rose 0.4 percent in February, the Bureau of Labor Statistics reported Tuesday, bringing inflation over the past twelve months to 6 percent — the lowest since September 2021.

Stubbornly high housing costs drove the upswing, says the agency’s report. The index for shelter, a calculation that captures both rent and what homeowners would pay if they rented the homes they occupy, accounted for 70 percent of the increase in the index for all goods.

The housing market is cooling, as a result of the Federal Reserve’s rate hikes since March 2022. In Houston, home prices fell for the first time in three years in February, according to a monthly sales report from the Houston Association of Realtors.

Still, the median home price in Houston was $320,000 last month, up more than 35 percent from a median home price of $233,000 in February 2019.

Rental prices in the region are still stubbornly high, a source of ongoing strain for many households. According to Zillow, the median rent for a one-bedroom apartment is $1,125 — meaning it would take three full-time, minimum-wage workers to comfortably afford such an apartment.

On Tuesday, the online portal for the Texas Rent Relief program crashed for several hours after reopening. A spokesperson for the state Department of Housing and Community Affairs said more than 4,000 applications were submitted within 45 minutes of the portal opening.

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DELIVERY OF RENT: The Texas Rent Relief Program is accepting applications today. This is how you apply.

Apart from housing, consumers may have noticed that prices have stabilized or even eased a bit. The price of medical services, for example, fell by 0.7 percent last month. The price of used cars and trucks fell 2.8 percent last month, and 13.6 percent compared to February 2022.

The price of gasoline rose slightly last month, although gas is down 2.0 percent compared to a year ago at this time. The price of groceries rose by 0.4 per cent in February, a modest increase compared to recent months – although food for home cooking has still seen inflation of 9.5 per cent over the past year. Historically, the prices of food and energy are more volatile than the prices of durable goods and consumer services.

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