Israel's Consumer Price Index Stagnates While Housing Prices Drop Sharply Since 2018

Israel's Consumer Price Index (CPI) for June remained unchanged compared to May, according to the Central Bureau of Statistics (CBS) report released on Wednesday. Inflation continues to decline amid interest rate cuts, standing at 1.6 percent over the past 12 months. Concurrently, the housing price index, which is separate from the CPI, fell by 1 percent between April and May 2026, marking the steepest drop since 2018.

Regionally, Jerusalem experienced the largest decrease in housing prices at 1.8 percent. Other areas saw smaller declines: the North by 0.3 percent, Haifa by 0.5 percent, and Tel Aviv by 2.3 percent, while prices in the South and Central regions remained stable. Year-over-year, housing prices dropped by 2 percent overall, with the Central district down 3.2 percent, Haifa 2.6 percent, and Tel Aviv 2.5 percent.

Regarding consumer prices, increases were noted in culture and entertainment (1 percent), health (0.6 percent), and food (0.4 percent). In contrast, significant price decreases occurred in fresh fruits and vegetables (5.2 percent), clothing and footwear (2.7 percent), and transportation (0.7 percent). Rent prices also rose, with a 2.6 percent increase for tenants renewing leases and a 6.6 percent rise for new renters.

The Bank of Israel governor attributed the moderate interest rate cuts to ongoing geopolitical uncertainties, which continue to influence economic conditions and inflation trends in the country.