Rebel Capitalist News You Won't Believe This...New Report Shows DEFLATION!!
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Nov 20, 2025 The conversation kicks off with surprising news about declining apartment rents in the U.S. for the first time in years. George delves into the factors behind the multifamily building boom and how developer assumptions led to inflated bids. He warns of regional banks' exposure risks linked to multifamily debt. The analysis includes impacts on the Consumer Price Index and potential Federal Reserve rate cuts. Notably, areas experiencing stark rent drops and those thriving due to AI demand are highlighted, adding depth to the economic landscape.
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Apartment Rent Deflation Is Here
- Apartment rents showed outright monthly declines in October, not just slower growth.
- Elevated new supply from 2021-22 development turned seasonal deceleration into deflation.
Overbuild Leaves Banks Exposed
- Multifamily developers overbuilt after 2021-22 bullwhip expectations of perpetual rent increases.
- That leverage and pro-forma bidding leaves regional banks exposed as rents decline.
Falling Rents Could Tighten Liquidity
- Falling rents can reduce liquidity via regional bank stress and the shadow-banking link.
- Lower liquidity can amplify market risks as more stressed assets are revealed.