Water Bills Rising but Phone Bills Falling

The monthly consumer price index (CPI) produced by the Bureau of Labor Statistics can provide important trends related to housing costs aside from mortgage and rent. For example, you are not the only person to be fuming over the water bill. The combined cost of water/sewage/trash collection has been rising at 5 to 6 percent annually for eight straight years. The latest monthly data shows a 0.5 percent jump in a single month, translating into a 6.3% annualized rate.

Telephone service costs fell 1 percent in 2011 after showing no change in 2010. That is what the data is saying, though some people will certainly disagree with this assertion.

The cost of utilities had only a modest increase of 2.9 percent in 2011 following an even tamer rise of 1.7 percent in 2010. These small changes are surprising because they tend to move in big swings – both up and down – because of the nature of oil/gas prices.

These costs should be considered by new home owners who may not have paid for these costs as renters. The costs should also be considered by landlords who are thinking of raising the overall rent.

The graphs show price trends of the above items compared to overall CPI.

Lawrence Yun, PhD., Chief Economist and Senior Vice President

Lawrence Yun is Chief Economist and Senior Vice President of Research at NAR. He directs research activity for the association and regularly provides commentary on real estate market trends for its 1 million REALTOR® members.

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