Costa Rica’s cost-of-living squeeze is showing up in one of the places residents feel most directly: rent.
Housing rents rose 3.67% between May 2023 and May 2026, even as the general inflation rate fell by 0.81% over the same period, according to a new analysis by the Costa Rican College of Economic Sciences.
The increase is part of a longer pattern. Residential rental costs have now posted 54 consecutive months of growth, showing a disconnect many renters already feel: inflation may look calm on paper, but housing has not become easier to afford. The trend is important because rent is not a small line item for lower-income households. Rising rental costs can limit access to stable housing, especially for families that already spend a large share of their income on a place to live.
The pressure is also showing up in housing conditions. The share of lower-income households living in informal settlements increased by 13.66 percentage points over the past three years. The deterioration was most visible in the second income quintile, which includes households living in poverty or at high risk of falling into poverty.
Home ownership has also slipped among the bottom 60% of households by income. The share of those households living in their own homes fell by 2.68 percentage points during the period studied, pointing to fewer stable housing options for families already under financial strain.
The rent increase stands out because Costa Rica has spent much of the past three years in an unusually low-inflation environment. As of June 2026, annual inflation had remained below the Central Bank’s target range for 38 straight months. During that stretch, only five months posted positive annual inflation, with the highest reading at 1.21% in February 2025.
Costa Rica’s Housing Ministry publishes the reference index used for maximum annual adjustments to residential rents. For May 2026, that figure was -0.97%, meaning the official adjustment reference remained negative.
But the wider rental market is moving in a different direction. Economists warned that the housing picture has become more serious because households are also dealing with weaker purchasing power, recent declines in real wages, fewer hours worked, slower economic expectations and announced cuts to housing programs.
Luis Vargas Montoya, an economist with the Costa Rican College of Economic Sciences, said Costa Rica needs more dignified housing options for lower-income families, especially those who have no alternative but to live in informal settlements. He also warned that the problem falls heavily on children and teenagers, who are more represented in those households and face weaker conditions for breaking out of poverty.
The findings add another layer to the cost-of-living debate. Inflation may remain low by official measures, but rent is still climbing, and for many households, that is the number that decides whether they can stay where they are, move to a cheaper area, or lose access to formal housing altogether.
