Real estate software artificially raised rents, DOJ lawsuit alleges

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Conway Gittens: I’m Conway Gittens, reporting from the New York Stock Exchange. Here’s what we’re watching today on TheStreet.

Stocks rose after a clear message from Federal Reserve Chairman Jerome Powell. “The time has come for politics to adapt. The direction of travel is clear, and the timing and pace of tariff reductions will depend on the data received.” Wall Street cut the full price by a quarter of a percentage point at its next meeting in September.

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

Watch ICYMI this week:

• Quitting your job for a new one just got harder
• Parent company 7-Eleven is on the brink of a mega merger
• Boeing’s 777X line faces another problem as testing is halted
• Carl Icahn will pay $2 million to settle SEC charges

In other news: The Justice Department and eight states are going after RealPage, a real estate software company, for allegedly aiding rent-seeking and collusion.

The antitrust lawsuit alleges that RealPage’s software collects confidential data about rental prices provided by landlords who pay to use the service. An algorithm then uses the data to come up with a number on how much rent landlords should collect for their properties. According to the lawsuit, the suggested rent is typically higher than it would be if the landlords were competing with each other on price.

Attorney General Merrick Garland said in a statement, “Americans shouldn’t have to pay more rent because a company has found a new way to scheme with landlords to break the law.”

In its defense, a RealPage spokeswoman described the algorithm as revenue management software that is “intentionally built to be legally compliant.”

Stubbornly high rents have been a gripe for Americans, turning it into a hot political issue. According to Zillow, between 2019 and 2023, rental prices increased by 20%.

That will do for your daily briefing. From the New York Stock Exchange, this is Conway Gittens with TheStreet.

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