Zillow: CPI Shelter Forecast, January 2026
Zillow forecasts 2.8% rent inflation, 3.3% OER inflation annually in January, as measured by the Consumer Price Index.
Written by Treh Manhertz on February 11, 2026
Update Following 02/13/2026 CPI Release:
The January CPI release showed housing inflation following a gradual downward trajectory. Reported figures aligned with our expectations for continued declines in both major housing measures.
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nSeasonally-adjusted CPI for Owner’s Equivalent Rent (OER) increased 0.22%, slightly softer than our expectation of 0.26%. The index rose 3.26% year over year, versus our expectation of 3.29%.
Seasonally-adjusted CPI for Rent of Primary Residence rose by 0.25%, slightly above our expectation of 0.21%. The index rose 2.84% year over year, versus our expectation of 2.78%.
Other smaller components of the Shelter category fell to lower levels in January, with spending on hotels down 0.5% and household insurance down 0.1% for the month, pulling the summary number down to 0.22%.
Housing inflation continued its expected downward trend into the new year. OER and Rent of Primary Residence both saw deceleration in month-over-month and year-on-year growth. Both are expected to slow further as low growth in market rents continues to take pressure off renter costs. Continued contributions to rental supply and weaker demand should sustain this market trend in the near term. Even as other categories are showing renewed signs of inflation, housing is an index heavyweight providing predictable downward pressure to headline inflation.
| Period | Owners’ Equivalent Rent | Rent of Primary Residence | ||||||
|---|---|---|---|---|---|---|---|---|
| Month-over-month | Year-over-year | Month-over-month | Year-over-year | |||||
| Forecast | Actual | Forecast | Actual | Forecast | Actual | Forecast | Actual | |
| August 2025 | 0.23% | 0.38% | 3.82% | 3.98% | 0.26% | 0.30% | 3.45% | 3.50% |
| September 2025 | 0.32% | 0.13% | 3.95% | 3.76% | 0.24% | 0.20% | 3.44% | 3.40% |
| October 2025 | 0.22% | X | 3.56% | X | 0.19% | X | 3.27% | X |
| November 2025 | 0.31% | X | 3.62% | 3.36% | 0.25% | X | 3.27% | 2.96% |
| December 2025 | 0.27% | 0.31% | 3.25% | 3.35% | 0.21% | 0.26% | 2.93% | 2.92% |
| January 2026 | 0.26% | 0.22% | 3.29% | 3.26% | 0.21% | 0.25% | 2.78% | 2.84% |
| + + + | + + + | + + + | + + + | + + + | + + + | + + + | + + + | + + + |
| December 2026 | 0.08% | -- | 1.76% | -- | 0.06% | -- | 1.51% | -- |
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New shelter inflation numbers from the Bureau of Labor Statistics are scheduled to be released on Friday, February 13, 2025 at 8:30 ET.
Key Takeaway
CPI housing inflation measures are expected to continue moderating through 2026, driven by the deceleration in market rents. We anticipate the weighty OER component will slow more quickly than previously expected, following downward revisions to the market rent forecast for single-family homes. Expectations for greater rental supply and a stagnant job market also support a flatter outlook for housing costs.
The Forecast
| Period | Owners’ Equivalent Rent | Rent of Primary Residence | ||||||
|---|---|---|---|---|---|---|---|---|
| Month-over-month | Year-over-year | Month-over-month | Year-over-year | |||||
| Forecast | Actual | Forecast | Actual | Forecast | Actual | Forecast | Actual | |
| August 2025 | 0.23% | 0.38% | 3.82% | 3.98% | 0.26% | 0.30% | 3.45% | 3.50% |
| September 2025 | 0.32% | 0.13% | 3.95% | 3.76% | 0.24% | 0.20% | 3.44% | 3.40% |
| October 2025 | 0.22% | X | 3.56% | X | 0.19% | X | 3.27% | X |
| November 2025 | 0.31% | X | 3.62% | 3.36% | 0.25% | X | 3.27% | 2.96% |
| December 2025 | 0.27% | 0.31% | 3.25% | 3.35% | 0.21% | 0.26% | 2.93% | 2.92% |
| January 2026 | 0.26% | -- | 3.29% | 3.26% | 0.21% | -- | 2.78% | 2.84% |
| + + + | + + + | + + + | + + + | + + + | + + + | + + + | + + + | + + + |
| December 2026 | 0.08% | -- | 1.76% | -- | 0.06% | -- | 1.51% | -- |
Owners’ Equivalent Rent (OER)
Monthly outlook: Owner's Equivalent Rent, which measures what homeowners would theoretically pay to rent their own homes, is projected to have increased 0.26% in January 2026 (95% confidence interval: 0.13% - 0.38%) continuing the trend of gradual slowing into the new year. This would bring the annual increase in the index to 3.29%, a slight moderation from 3.35% in December. We expect the monthly growth to continue trending downward to a 0.08% pace over the next year.
Annual outlook: We forecast OER to rise 1.76% over 2026, a large slowdown from the 2025 increase.
Rent of Primary Residence
Monthly outlook: Rent of Primary Residence, which tracks rent payments, is projected to have increased 0.21% in January 2026 (95% confidence interval: 0.08% - 0.35%), continuing last year’s downward trend. This would bring the annual increase in the index to 2.78%, a slight moderation from 2.92% in December. We expect the monthly growth to continue trending downward to a 0.06% pace over the next year.
Annual outlook: We forecast the Rent of Primary Residence index to rise 1.51% over 2026, a substantial slowdown from the 2025 increase.
Market Rents
Single-family: Zillow’s expectations for on-market rent growth for single-family units were revised down: single-family rents are now expected to rise 1.1% in 2026, slowing to 0.5% growth in 2027.
Multifamily: Zillow’s expectations for on-market rent growth for apartments were revised down: multifamily rents are expected to fall 0.2% in 2026, followed by a 1.5% decline in 2027.
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.
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