Inflation Eases in May as Housing Prices and Rents Show Mixed Trends

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Israel’s consumer price index fell 0.3% in May 2026, though annual inflation remained 1.9%. Housing costs were mixed, with rents and construction input prices rising while apartment prices declined monthly and annually.

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CPI fell 0.3% in May 2026, but annual inflation stayed at 1.9%.
Transportation prices dropped 2.7%, while clothing, culture and housing rose.
Renewing tenants paid 2.5% more, and new tenants faced a 6.8% jump.
Construction input costs for housing rose 0.6% in May and 3.5% year on year.
Apartment prices fell 0.3% in March-April and 1.3% over 12 months.

Israel’s consumer price index fell 0.3% in May 2026 from April, according to the Central Bureau of Statistics. Even so, inflation over the past 12 months remained positive at 1.9%. The sharpest monthly declines were in transportation, down 2.7%, and furniture, while clothing, culture and housing posted increases.

The rental market remained under pressure. Tenants renewing leases paid 2.5% more, while new tenants faced a 6.8% jump in rent. At the same time, the construction input price index for residential building rose 0.6% in May and 3.5% over the past year, driven mainly by a 5.3% increase in labor costs in the sector.

Housing prices themselves, though not part of the general CPI, also declined. The housing price index fell 0.3% in the March-April 2026 period. By district, prices dropped sharply in Jerusalem, down 2.0%, and Haifa, down 1.9%, while the center and Tel Aviv saw slight increases.

On a yearly basis, apartment prices in Israel were down 1.3%, with new homes falling even more steeply, by 3.9%. The annual pattern showed declines in the center, Tel Aviv, Haifa and the south, alongside increases in the north and Jerusalem.

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