Lawsuit Alleges Real Estate Program Artificially Raised Rents

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CONWAY GITTINS: I’m Conway Gittins, a reporter from the New York Stock Exchange. Here’s what we’re watching on TheStreet today.

Stocks rose after a clear message from Federal Reserve Chairman Jerome Powell. “The time has come to adjust policy. The direction is clear, and the timing and pace of rate cuts will depend on incoming data.” Wall Street has set a quarter-point rate cut at its September meeting.

Inflation watchers will be on alert next week with the release of July’s personal consumption expenditures index – the Fed’s preferred inflation gauge.

ICYMI Watch this week:

• It has become more difficult to leave your job for a new one.
• 7-Eleven’s Parent Company Is on the Brink of a Massive Merger
• Boeing’s 777X production line faces another hurdle as testing halts
• Carl Icahn to pay $2 million to settle SEC charges

In other news: The Justice Department and eight states are suing RealPage, a real estate software company, for allegedly helping to raise rents and colluding.

The antitrust lawsuit alleges that RealPage’s software secretly collects data on rental rates offered by landlords who pay to use the service. It then uses an algorithm to come up with a figure for how much rent landlords should charge for their properties. According to the lawsuit, the proposed rent is typically higher than it would be if landlords were competing with each other on price.

“Americans should not have to pay more rent because a company found a new way to conspire with landlords to break the law,” Attorney General Merrick Garland said in a statement.

In its defense, a RealPage spokeswoman described the algorithm as revenue management software “specifically designed to be legally compliant.”

High rents have been a persistent complaint among Americans, turning them into a hot-button political issue. According to Zillow, rents rose 20 percent between 2019 and 2023.

That’s all for your daily briefing. From the New York Stock Exchange, I’m Conway Gittins on The Street.

Related: Renting a home is still cheaper than buying it for most Americans