Zillow: CPI Shelter Forecast, October 2025
New shelter inflation numbers from the Bureau of Labor Statistics are scheduled to be released on Thursday, November 13, 2025 at 8:30 ET.
Key Takeaway
CPI housing inflation measures should continue to moderate into 2026, driven by decelerating market rents over the last few months. Near-term challenges in collecting and publishing official data may muddle the key trend of gradually slowing housing inflation.
The Forecast
Owners’ Equivalent Rent (OER)
Owner’s Equivalent Rent, which measures what homeowners would theoretically pay to rent their own homes, is projected to have increased 0.22% in October 2025 (95% confidence interval: 0.09% – 0.34%), higher than the 0.13% pace reported in September, but just slightly slower than the 0.26% average rate of the last quarter. We expect this measure to continue trending downward over the next year.
Annual outlook: We now forecast OER to end the year up 3.6% year-over-year, followed by a 2.8% increase in 2026. In September, the OER index was up 3.8% year-over-year.
Rent of Primary Residence
Rent of Primary Residence, which tracks rent payments, is projected to have increased 0.19% in October (95% confidence interval: 0.0.05% – 0.32%), roughly flat with the 0.20% reported in September.
Annual outlook: We forecast the Rent of Primary Residence index to end the year up 3.0% year-over-year, before decelerating to a 1.8% increase in 2026. In September, the Rent of Primary Residence index was up 3.4% year-over-year.
Market Rents
Zillow’s expectations for on-market rent growth in 2025 remained relatively unchanged: single-family rent expected to decelerate to 2.9% annually, while annual apartment rent increases should slow to 1.3%. Both measures are forecast to slow further in 2026, falling to 2.0% and -0.4% rent growth, respectively.
The shelter components of the CPI continue to increase at a faster pace than these on-market rent trends, reflecting not only new lease pricing but also rent changes for renewing and longer-term tenants.
Methodology
These forecasts are based on predictions from a model that makes explicit the relationship between on market rents (measured by the Zillow’s Observed Rent Index) and the shelter components of the Consumer Price Index (CPI).
The model incorporates:
- Expected on-market rent growth (Zillow’s Observed Rent Forecast, ZORF)
- Assumptions about how landlords adjust rents at lease renewal
- Renter mobility rates, which determine what share of tenants face a market rent increase.
