Owners’ Equivalent Rent (Oer)

Owners’ Equivalent Rent (OER) Owners’ equivalent rent (OER) is an estimate of how much rent a homeowner would have to pay to live in their own home if they were renting it. It represents the “implicit rent” of owner-occupied housing and is used to approximate the shelter cost faced by homeowners without relying on actual sale prices or mortgage payments. How OER is measured
* The Bureau of Labor Statistics (BLS) collects OER through a household survey. Respondents are asked how much their home would rent for monthly, unfurnished and without utilities.
* The BLS aggregates those responses and reports changes in OER as part of the Consumer Price Index (CPI). The agency publishes the month‑to‑month and year‑over‑year percentage changes.
* OER is an estimate of rental value—not a record of actual rents or mortgage costs.
OER’s role in the CPI and inflation
* OER is a major component of the CPI’s “shelter” category. Shelter also includes “rent of primary residence” and lodging away from home.
* Because shelter typically represents a large share of household spending, changes in OER strongly influence overall CPI inflation readings.
* OER tends to move with broader housing-market pressures and inflation. When shelter costs rise, OER usually increases and contributes to higher CPI inflation.
Factors that affect OER
* Local rental market conditions and demand for housing
* Interest rates and mortgage availability (which influence buying and selling activity)
* Property taxes, insurance costs, and other ownership expenses
* Broader macroeconomic conditions that affect incomes and housing demand
Why OER matters to consumers and policymakers
* For consumers: OER gives insight into the relative cost of renting versus owning and helps inform housing decisions (e.g., whether renting or buying is more economical given current market conditions).
* For policymakers and economists: OER is used to monitor shelter inflation and to guide monetary and fiscal policy decisions that respond to price‑level trends.
Common questions
* What’s the difference between OER and actual rents?
OER is a survey-based estimate of what owner-occupied units would rent for; actual rent statistics reflect transactions in the rental market. Explore More Resources

  * How is OER used in inflation measurement?

OER is part of the CPI’s shelter component and therefore influences the CPI’s measure of consumer inflation.
Bottom line Owners’ equivalent rent is a survey-based estimate of the rental value of owner‑occupied housing. It plays a central role in measuring shelter costs within the CPI and helps signal shifts in the housing market that affect both household decisions and inflation readings. Explore More Resources