The Impact of Airbnb on Housing, Inflation, and Renters in the U.S.

In a recent economic commentary, Raymond James’ Chief Economist Eugenio J. Alemán delves into the complexities of inflation and shelter costs in the U.S. economy. The article highlights a significant slowdown in shelter costs in June, followed by a resurgence in July, contributing to the overall increase in inflation. A key factor influencing these shelter costs is the rise of the sharing economy, particularly platforms like Airbnb.

The discussion points out that the price elasticity of housing is highly inelastic, meaning that even with increased demand, the supply of homes does not significantly rise in the short to medium term. This creates a situation where home prices continue to climb. Furthermore, the article explores how the popularity of short-term rentals through platforms like Airbnb has reduced the availability of long-term rental units, driving up rental prices and impacting inflation rates.

As the economy gradually normalizes post-pandemic, the influence of short-term rentals on the rental market and inflation may begin to diminish, helping to ease shelter costs and contribute to the broader disinflationary process.

The foregoing material is for information purposes only and does not purport to be a complete description of the material referenced herein, nor is it a recommendation. The information has been obtained from sources considered to be reliable, but there is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Any opinions are those of J. Blum & Associates Wealth Management and not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. There is no assurance that any investment strategy will be successful. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions. Every investor’s situation is unique, and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

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