Yahoo Finance's Vera Gibbons outlines which housing markets may be showing signs of cooling amid period of elevated inflation.

Video Transcript

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RACHELLE AKUFFO: All right, well, staying on the topic, the cost of rent rose 0.8% in September and is up over 7% year-over-year. But there are some signs the market may be cooling off. Yahoo Finance contributor Vera Gibbons joins us with the details. Vera, what do we need to know?

VERA GIBBONS: Well, yes, I mean, the overall inflation rate was a little uncomfortable for a lot of us because it's still well above the Fed's 2% target rate, and rents are a big part of that. Rent and food continue to go up. But the thing with real estate, as your last person just pointed out, is that it is local.

So while we are seeing rent growth continue to rise in some of those peripheral markets outside of the core cities, like Cambridge, Massachusetts, Fremont, California, Tempe, Arizona to name three, we are seeing an overall leveling off, or plateauing, if you will, in rents in many of the other markets throughout the country. And this is providing welcome relief for renters who have seen sky-high rises almost month-over-month.

DAVID BRIGGS: Vera, how significant is rent when it comes to the inflation number we're seeing? And therefore, how warped a sense are we getting of how lagging this data is, as we just learned from Dani Romero?

VERA GIBBONS: You point out-- you make a good point because it is pretty significant when you take a look at the inflation rate. You see rents and food, big parts of the inflation data, it shows it's at uncomfortably high levels. But the good news is that in the major cities that saw the biggest run-up in rent prices, we are seeing a leveling off, or a plateauing.

I was speaking to the CEO of Zephyr, and he said that in over half of the cities he actually follows, he is, in fact, seeing a plateauing of those rents. Places like Nashville, Tennessee, a lot of the Florida markets, for example, they're coming down, but it's important to point out that we're coming off of very high highs. We're coming off very elevated levels.