An unexpected economic indicator is emerging as a powerful predictor of consumer behavior: rental prices. According to Jonas Bordo, CEO of rental marketplace Dwellsy, rental data has become a crucial metric for understanding broader economic trends, particularly in retail spending.
“If you understand what’s happening with the rent, it tells you a lot about what’s going on with the consumer in that area,” Bordo says. “If rents are going up a lot and income isn’t, well, that consumer is squeezed.”
This squeeze on consumer spending power has direct implications for retailers, Bordo argues. “For Target, they’re probably going to get hurt. Walmart might actually benefit as people trade off from Target and start shopping at Walmart instead, because it’s perceived to be a little cheaper.”
This insight has caught the attention of major retailers, who are now among Dwellsy’s diverse client base. “Retailers are buying the data, which I wouldn’t have guessed,” Bordo notes. “The rent data turns out to be a proxy for the condition of the American consumer, which is fascinating to me.”
The value of rental data as an economic indicator comes from several key factors. It provides real-time insight into consumer financial health, offering a snapshot of how much income households are allocating to housing each month. Its geographic specificity reveals local market conditions that national metrics might miss, highlighting regional shifts in affordability and demand. Because rent levels directly correlate with disposable income, they help gauge consumers’ capacity for other spending. Taken together, these elements make rental data a reliable leading indicator of broader economic trends.
Bordo points out that previous attempts to understand housing costs relied on imperfect methodologies. “One of the researchers that we work with over at the Federal Reserve made a comment… ‘We’ve always had to ask people what the groceries in their pantry are worth. Now, we can go to the grocery store and check prices for the first time in this category.'”
This shift to actual market data represents a significant improvement in understanding consumer economics. “That character of the data, that it is that accurate and that specific and that granular, has enabled really an incredible level of creativity around different research projects,” Bordo explains.
The implications of rental data reach far beyond the retail sector. Academic researchers use it to study the economic impacts of natural disasters and regional disruptions. Financial institutions, including banks and insurance companies, rely on it to assess market risk and forecast credit conditions. Real estate developers analyze rent trends to better understand market dynamics and set pricing strategies. Policymakers also draw on these insights to inform housing initiatives and consumer protection measures, making rental data a critical tool across multiple industries.
As the relationship between rental costs and consumer behavior becomes clearer, Bordo suggests this data will become increasingly valuable for business strategy. “We’re seeing a really wide variety of different takes on all of those questions across the landscape of academic inquiry,” he notes.
The evolution of rental data as an economic indicator represents a significant shift in how businesses understand and respond to consumer behavior. As more industries recognize its predictive value, rental data may become as fundamental to business planning as traditional consumer confidence indices.
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