The Ominous Fact Hiding In September’s Tame Consumer Price Index Report- By NEIL SISKIND

Owners’ equivalent rent of primary residence, which is what a homeowner would pay to rent or receive from renting a home, rose 0.2 percent in September after rising 0.3 percent in August. (Owners’ equivalent rents nationwide is a little vague and difficult to measure, if you ask me.)

This lower rate of growth is a good thing, as oil and gasoline prices (a little lower in September than in August), interest rates, and tariffs, have been rising- while wages, largely, have not. At least, consumers get some reprieve.

But here’s the rub: Some people think that if home purchases (single family homes or condominiums) go lower, it means that rental demand and rents will rise[1]. And, if rents decline, they think that it means home ownership demand is strong. It’s a possible correlation at times, but it’s not, necessarily, true. It can simply mean there is a market imbalance- specifically, an oversupply.

Weak housing markets begin at the highest price-points, with homes that are owned by investors and second home owners (and those who bit off more than they can chew during good times) hitting the market- and with the weakness and growing inventories trickling down. This leads to investors and second homeowners capitulating and deciding to rent-out their homes while the house sits on the sale market. This adds to the rental inventory- starting at the highest points, and then hitting the markets below.

The lower than expected CPI may be and probably is, when combined with other recent housing, home loan, mortgage rate, and home-builder data, indicating a slowing housing market, with sales taking longer than expected for investors and second home owners, which is causing rental inventories to rise simultaneously with sales inventories-  rather than indicating that renters are deciding to buy.

It’s not only that inflation is tepid- underlying growth is slowing. You won’t hear many on “Wall Street” acknowledge that growth is already slowing (while many acknowledge a slowing to begin next year- and many have changed from 2020 to 2019 on that issue), because “Wall Street” ignores, or fails to understand the economics of real estate- which is how they, and we all, got into trouble in 2007- and why, even at this late stage in the cycle, investment funds are raising capital to buy office buildings and warehouses- at inflated prices and low cap rates that rents will not support.



  1. This can be true, but rents would only rise if rental inventories are low at such time. It depends on inventory levels- supply and demand.


Neil S. Siskind, Esq., President
The Siskind Law Firm
Tel: 646.530.0006

Neil Siskind is the Founder & Chairman of The Fatherhood Assignment
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The Neil S. Siskind Nature Preserve is over 7 acres of environmentally-pristine waterfront land in a magnificent setting along New York’s majestic Hudson River. The Preserve includes a variety of species of animal and plant life, and is a precious example of the thoughtful maintenance of New York’s priceless open spaces. The land’s uses are limited to outdoor recreation such as hiking and climbing, and the study of ecology, nature and land use. The Neil S. Siskind Nature Preserve allows for the intelligent contemplation of our valuable natural resources and the most effective ways to maximize them and keep them protected.

Neil Siskind, Founder, “National Fatherhood Day” – March 29th

To encourage recognition of the needs of boys and girls who are living without fathers or father-figures in their lives.

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– Memorial Sloan Kettering Cancer Center, Volunteer

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– Saving Senior Citizens- Protecting New York’s senior citizens from fraud and financial abuse

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– In development: The Neil S. Siskind School of Hope: A free school to teach inner-city youths the skills of entrepreneurship and importance of economic self-sufficiency.

Neil Siskind’s Government Work:

– Suffolk County District Attorney’s Office, Boston, MA, 1994, Intern
– Office of Senator Christopher J. Dodd, Newington, CT, 1992, Intern
– Hartford County Department of Probation, Hartford, CT, 1991, Intern

Neil Siskind’s Community Assistance:

Financed & operated a legal clinic providing low-cost legal services to struggling Long Islanders during the recession to help clients resolve debt, organize finances, and launch new businesses.

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