Higher housing costs levitate Denver-Boulder inflation rate

Higher rents and skyrocketing natural-gas prices overcame a drop in gasoline prices to push the overall Denver-Boulder-Greeley Consumer Price Index up 2.8 percent in the second half of 2013, the U.S. Bureau of Labor Statistics reported Thursday.

Shelter costs, which have a heavy weighting in the index, rose 4.9 percent and were the biggest driver of inflation in the second half of the year, according to the report.

Rent, a component of shelter, was up 7.3 percent in the second half in the index, compared with a 2.9 percent gain nationally and a 3.2 percent rise in the Western U.S.

Ryan McMaken, an economist with the Colorado Division of Housing, said a survey that the division oversees showed rents in metro Denver rising 6.4 percent in the fourth quarter.

For the past several years, builders have added fewer new housing units to the market than the growth in new households being formed, he said, and are trying to catch up.

“It’s the most solid period of rent growth we’ve seen since the dot-com boom days,” McMaken said.

Prices for food, apparel and transportation were either flat or saw minuscule increases, according to the report, and gasoline prices were the only item to show a significant drop, falling 3.8 percent. A much colder fall and winter than in 2012 sent home heating costs spiraling upward. Natural-gas costs were up 25.8 percent in the second half of 2013 compared with the same period in 2012.

The consumer inflation index for Denver-Boulder-Greeley is calculated twice a year. Inflation in the second half matched the pace seen in the first half and was running at its highest pace since the 3.6 percent rate in the second half of 2011.

Aldo Svaldi: 303-954-1410, asvaldi@denverpost.com or twitter.com/aldosvaldi