One major city has emerged as stand out winner in the war on inflation - with prices rising at a far slower pace than other areas across the U.S.

Consumer prices in Phoenix, Arizona, rose by 2.6 percent between April 2023 and last month, according to data from the Bureau of Labor Statistics. 

This is almost down to the Federal Reserve's 2 percent target, and is far lower than the higher national annual inflation rate of 3.4 per cent. 

The result is also is not a one-off, with the city holding its rate below 3 percent since October last year - and even falling to as low as 2.2 percent in February.  

Economists say the key to Phoenix's lower inflation rate is cooling rents and home prices, NBC News reported. 

Prices in Phoenix, Arizona , rose only 2.6 percent from April 2023 to last month - beating the national average of 3.4 percent and almost meeting the Federal Reserve 's 2 percent target

Experts insist that when rent prices come down, overall inflation falls too - and Phoenix's home prices have fallen over the past few years

Experts explained that when rent prices come down, overall inflation falls too. 

'Housing inflation remains my most valuable indicator for the immediate future,' Federal Reserve Bank of Chicago President Austan Goolsbee said last month. 

In Phoenix, median home sale prices rose 5.1 percent to an average of $450,000 between April 2023 and April 2024.

But the increase came as sales slowed sharply, with nearly 3 percent fewer homes sold than in the previous 12 month period, according to Redfin data. 

Phoenix sellers are also caving to a lack of demand, with 31 percent of homeowners slashing their asking prices in March.  

Mark Stapp, a real estate professor at Arizona State University's W.P. Carey School of Business, told NBC News: 'We are likely past the worst of things in terms of this substantial, persistent increase in rents and home prices in Phoenix, and we are going to be back to something that is more reflective of normal trends.'

Phoenix is the fifth most populated city in the United States with 1,650,070 residents, according to a 2023 estimate. The population grew 2.6 percent from 2020 to 2023. 

The city is attractive to people looking for warm weather, job opportunities, a strong economy - as well as picturesque natural landscapes and a bustling downtown scene. 

The city is attractive to people looking for warm weather, job opportunities, a strong economy - as well as picturesque natural landscapes and a bustling downtown scene

Phoenix is the fifth most populated city in the United States with 1,650,070 residents, according to a 2023 estimate. The population grew 2.6 percent from 2020 to 2023

In recent months, the population boom has slowed - with a new analysis from Thursday showing that the previous 1.6 annual rate of growth has dropped to just 0.4 percent between 2019 and 2023. 

Housing projects started before and during the pandemic are now wrapping up and there are not enough newcomers or house hunters to fill the properties.

'It’s going to be a painful period of adjustments', Moser told NBC News.

Vacancies in some apartment complexes are as high as 11 percent, which is far above the roughly 6 percent he considers typical of a healthy market. 

Moser said this could be good news for renters, who could see rent declines of between 2 percent and 4 percent over the next year. 

The rent slowdown in Phoenix has also had an impact on the city's overall 'shelter index' - which is what it costs put a roof over ones head. 

This index is key to the overall inflation rate, and have contributed to other similarly lower than average inflation rates in areas such as Houston and Alaska.