Zillow: CPI Shelter Forecast, May 2026
New shelter inflation numbers from the Bureau of Labor Statistics are scheduled to be released on Wednesday, June 10, 2026 at 8:30 ET.
Key Takeaway
CPI housing inflation is now expected to hold near its current pace through the remainder of 2026, an upward revision driven by single-family market rents rising more than expected in April.
Firmer spring new-lease prices should keep measured housing inflation from decelerating as fast as previously assumed, partially offsetting the structural disinflation in shelter. Zillow Research interprets this as normalization at a higher level, not re-acceleration: Market rent growth responds to the gap between the rental vacancy rate and its natural rate. With the vacancy rate having somewhat normalized, the post-pandemic tightness is largely spent.
Shelter components of the CPI are rising at a faster pace than on-market rents, reflecting softer new lease pricing alongside hikes for renewing and longer-term tenants.
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 | |
| December 2025 | 0.27% | 0.31% | 3.25% | 3.36% | 0.21% | 0.27% | 2.93% | 2.92% |
| January 2026 | 0.26% | 0.22% | 3.29% | 3.26% | 0.21% | 0.25% | 2.78% | 2.84% |
| February 2026 | 0.18% | 0.22% | 3.14% | 3.19% | 0.19% | 0.13% | 2.74% | 2.68% |
| March 2026 | 0.21% | 0.28% | 3.02% | 3.10% | 0.17% | 0.19% | 2.55% | 2.56% |
| April 2026 | 0.44% | 0.53% | 3.20% | 3.30% | 0.39% | 0.55% | 2.63% | 2.79% |
| May 2026 | 0.25% | — | 3.27% | — | 0.20% | — | 2.76% | — |
| + + + | + + + | + + + | + + + | + + + | + + + | + + + | + + + | + + + |
| December 2026 | 0.24% | — | 3.32% | — | 0.21% | — | 2.83% | — |
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 0.25% in May 2026 (95% confidence interval: 0.12% – 0.38%). This would bring the annual increase in the index to 3.27%. We expect the monthly growth to trend toward a 0.24% pace over the year.
Annual outlook: We forecast OER to rise 3.32% over 2026, keeping pace with the 2025 increase of 3.36%.
Rent of Primary Residence
Monthly outlook: Rent of Primary Residence, which tracks rent payments, is projected to have increased 0.20% in May 2026 (95% confidence interval: 0.05% – 0.34%). This would bring the annual increase in the index to 2.76%. We expect the monthly growth to trend toward a 0.21% pace over the year.
Annual outlook: We forecast the Rent of Primary Residence index to rise 2.83% over 2026, only a slight slowdown from the 2025 increase of 2.92%.
Market Rents
Single-family: Zillow’s expectations for on-market rent growth for single-family units were revised up: Single-family rents are now expected to rise to a 3.2% year-over-year increase by the end of 2026, up from 2.7% in April.
Multifamily: Zillow’s expectations for on-market rent growth for apartments were revised up: Multifamily rents are expected to rise to a 2.1% year-over-year increase by the end of 2026, up from 1.3% in April.
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.