Despite signs that overall inflation is cooling, housing costs remain one of the most persistent inflationary pressures in the U.S. economy. According to the Bureau of Labor Statistics, shelter expenses made up more than half of the overall inflation in April 2025.

The Consumer Price Index (CPI) rose just 0.2% month-over-month in April, but housing inflation played an outsized role. Shelter costs increased by 0.3%, slightly higher than in March, continuing a trend that’s proving difficult for policymakers and consumers alike.

Shelter Costs Make Up Over 50% of April Inflation

Compared to a year ago, shelter costs have climbed 4%, highlighting the long-term challenges in the housing market. Owner’s equivalent rent—an estimate of how much a homeowner would pay to rent their own home—rose 0.4%, while traditional rent prices jumped 0.3% in April.

These rising shelter costs complicate the Federal Reserve’s strategy to curb inflation across the board. While goods and services outside of housing show signs of stabilization, housing continues to lag behind.

Is Housing Inflation Slowing in 2025?

There are early indicators that housing inflation may be beginning to cool. A boom in multifamily construction since the pandemic has helped stabilize asking rents in many parts of the country. Additionally, home price growth has slowed compared to the rapid appreciation seen in recent years.

However, elevated mortgage rates and borrowing costs are still major roadblocks for potential buyers and sellers. As a result, housing market activity remains sluggish despite underlying demand.

What Experts Are Saying About Housing Costs in 2025

“With the spring housing season underway, both buyers and sellers are facing a market where optimism over lower inflation is tempered by elevated borrowing costs and economic uncertainty,” said Jake Krimmel, Senior Economist at Realtor.com.

Krimmel added, “Until borrowing costs fall meaningfully, housing activity is likely to remain subdued, even as underlying demand and supply slowly improve.”

Should You Buy a House in 2025?

While lower inflation may bring some relief to consumers, rising shelter costs and high mortgage rates continue to make home buying a challenge. If you’re asking, “Is it a good time to buy a house?” the answer depends heavily on your local market, financial stability, and how mortgage rates evolve in the coming months.

As housing inflation remains one of the “stickiest” components of the CPI, all eyes will be on the Fed’s next moves and whether further economic cooling can bring meaningful relief to housing costs in 2025.