Housing costs rise at slowest annual rate in two years as inflation eases

Housing costs remained elevated in April, serving as the largest contributor to core inflation's rise last month, but there remain signs that prices are starting to moderate.

The shelter component of the Consumer Price Index, which is mostly made up of rent and homeowners' equivalent rent (OER), rose 0.4% in April, matching March's monthly gain, according to data from the Bureau of Labor Statistics data released Wednesday.

Shelter costs rose 5.5% over the prior year, the slowest annual increase since June 2022 and down from a peak of 8.2% reached in March of last year.

Shelter costs accounted for over two-thirds of the annual increase in "core" inflation, which excludes food and energy prices. Shelter and gas prices accounted for 70% of the rise in headline inflation, which includes all categories, according to the BLS.

Read more: Inflation slowed in April — here’s how that affects your wallet