Every month we pull together our own leasing data, but this month we’re pairing it with some bigger-picture economic context. Noah Blanton with WFG gave a recent economic update here in our Living Room office that helps explain a lot of what we’ve been seeing on the ground here at Living Room Realty, and it points to some things owners should have on their radar heading into next year.
The CPI Story and What It Means for 2027 Rent Caps
Next month, the Bureau of Labor Statistics releases the CPI figure that Oregon uses to calculate next year’s rent increase limits. The expectation shared in the update is that CPI will land somewhere between 3.4% and 3.6%. CPI stands for Consumer Price Index. It’s a measure the U.S. Bureau of Labor Statistics puts out that tracks how much prices are changing for a broad basket of everyday goods and services (things like housing, food, transportation, and healthcare) compared to a previous period. It’s the most commonly used gauge of inflation in the country.
Here’s why that matters: Oregon’s rent increase cap is set at 7% + CPI. If CPI comes in as expected, that puts the 2027 cap somewhere around 10.4% to 10.6%, landing in roughly the same territory as Washington State’s already-finalized 2027 cap of 10%.
It’s worth being clear about what that number actually means, though. A legal ceiling isn’t a mandate. Just because the law permits an increase that size doesn’t mean it’s what actually happens at renewal. For long-term rentals, most owners we work with aren’t chasing the maximum allowable increase; they’re trying to keep a good tenant in place. Unless there’s an urgent reason to sell, for tax purposes or otherwise, vacancy is rarely what an owner actually wants. A high cap gives room to maneuver if it’s needed; it doesn’t change the underlying goal of keeping a stable, paying tenant in the home.
A Soft Job Market, but Not a Layoff Economy
Oregon is currently tied for the #1 spot nationally for unemployment, sitting at 5.1%. On its own, 5.1% isn’t an alarming number. The real story is the gap between where Oregon sits and where the national number sits. Hiring has stalled more than jobs have disappeared. This is a soft labor market, not a shrinking one.
At the same time, Oregon keeps growing. Net migration, not births, is the number one driver of the state’s population growth, with 15,000 to 20,000 people moving here annually. The open question isn’t whether people will keep coming; it’s whether the job market can absorb them once they arrive.
What This Means for Attached Homes
With hiring stalled and affordability under pressure, the prediction coming out of this update is that rates for multifamily and other attached-home product types will soften. No one’s putting a hard number on it yet, but our own first-half 2026 data backs up the direction: condos in our portfolio are capturing only about 93% of the rent the previous tenant was paying at turnover. Townhomes have held up better; rents have stayed relatively flat, but owners are having to invest more in prepping and updating those homes just to hold that line.
Renters Are Thinking Long-Term (Even When They Can’t Buy)
Two stats from the update stuck with us: 67% of millennial renters currently have $0 saved toward a home purchase, and only 46% of Gen Z renters believe they’ll ever be able to afford a home they’d actually like.
Choosing a home, whether renting or buying, comes with real emotional weight, and we see that show up constantly in what today’s renters are asking for. They want homes that feel put-together. They’re not just looking for four walls; they’re looking for something they can feel proud to call theirs, even if it’s not permanent. For rental property owners, the formula that’s working right now is straightforward: keep rates approachable, and keep the home well maintained. That combination is what’s actually converting lookers into leases in this market.
What We Saw in Our Own Portfolio This July
Our own July numbers tell a version of this same story. New leasing volume was modest. With very few move outs over May and June, there was not much inventory to move in July. Only a handful of move-ins closed out the month, with days-on-market varying widely depending on the property, from as little as under a week to well over a month for a couple of listings that saw longer marketing periods. Rent outcomes at turnover were mixed: some homes leased at essentially flat rents compared to the outgoing tenant, one saw modest growth, and at least one single-family home saw a dip, echoing the broader softening we’re seeing in attached and multifamily product.
On the renewal side, the story was clearer. Of the leases up for renewal in July:
- 50% signed new fixed-term contracts, ranging from 6 to 24 months
- 34% converted to month-to-month
- 15% moved out
Normally, month-to-month terms carry a 3% to 8% premium, since tenants expect to pay more for that flexibility. This month, rates on MTM conversions stayed essentially flat. Owners simply don’t have the appetite for turnover right now, and our guidance has been to keep MTM increases under 3% so tenants feel valued rather than priced out during a stretch where economic uncertainty is already weighing on everyone. So far, tenants are responding well. The only renewals we’re losing are to genuine life changes like relocation, not to rate shopping. People don’t want to move right now if they don’t have to, and that’s working in owners’ favor.
The Takeaway
Between a softening attached-home market, a job market that’s stalled but not collapsing, and renters who are prioritizing feeling settled over chasing the next best deal, the winning strategy for owners this fall looks a lot like what’s already working: keep the home well cared for, keep pricing reasonable, and give tenants a reason to stay. 2027’s rent cap will likely land north of 10%, but that’s a ceiling, not a target. The owners who come out ahead won’t be the ones who raise rents to the legal max; they’ll be the ones who used the room that cap provides wisely, while keeping a good tenant in place. That’s where the real value is right now.
Have questions about how these trends might affect your specific property? Reach out to your Living Room Realty property manager.