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The shelter component of the Consumer Price Index rose to its highest rate since 2007 in December 2021, and prices are still going up, according to The measurement of equivalent rent for single-family homes rose 3.8% year-over-year from December 2020 to December 2021, but the CPI is still playing catch up with some home price movements as existing leases reset at the start of the year.

The S&P CoreLogic Case-Shiller Home Price Indices reported a 19.1% annual gain in national home prices during the month of October, and the latest rent report from Apartment List showed a 17.8% increase in median rent nationwide. Housing inflation is showing its first signs of deceleration after sharp rises at the end of 2021, though economists agree that the CPI may measure more gains through the first half of 2022.

“My guess is that market rents growth probably hit the top in December, which means that the shelter component can accelerate until August,” said Christophe Barraud, chief economist strategist at Market Securities France SA.

Some analysts, however, believe the inflation peak could come far sooner. Jeffries chief economist Aneta Markowska and money market economist Thomas Simons wrote in a research note Wednesday that the CPI’s measure of rent could hit its peak as soon as February or March.

“The CPI housing components have been undershooting market rents, which have risen much more sharply, and it’s not entirely clear why,” they wrote, adding that because the CPI’s housing barometers “have not even begun to catch up, at this point we probably have to assume that they won’t.”

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