We reviewed Zillow (ticker: ZG) Rental data for clues to true rental price inflation. Zillow rental data tells a different story than the Fed’s rental survey data (Owners’ equivalent rent of residences), which is comprised of hypothetical information based on homeowner assumptions (see page 1, heading labeled: Weights for OER and Rent).
The Fed’s rental “data” is hardly scientific. It details a year-over-year rental price increase of 2.3% based upon homeowner responses to the question “If someone were to rent your home today, how much do you think it would rent for monthly, unfurnished and without utilities?” Compare the Fed’s 2.3% figure to Zillow’s real world data which tells the story of a 7.1% year-over-year price increase in rental data (table below). Another example of how the Fed manipulates data in order to perpetuate its chosen narrative.