New York City's Rising Rents Show No Signs of Slowing

New leasing is up as higher mortgage rates encourage renting over buying.

Industrial-looking apartment building at 40 Mercert St. in NYC
Jean Nouvel's 40 Mercer Street, New York City. Jackie Craven

Rents climbed to near records across New York City in February as limited inventory and the higher cost of buying put strains on Manhattan, Brooklyn and Queens. 

Key Takeaways

  • Net effective median rents rose for the 18th straight month in Manhattan.
  • Manhattan leases rose year-over-year by 43.5%, the biggest annual increase in new leases in the last 19 months.
  • Brooklyn's median rents rose 17.2% year-over-year.

Net effective median rents rose from a year earlier for the 18th straight month in Manhattan as landlords grew less willing to grant concessions and renters desperate to find a home amid dwindling inventory engaged in bidding wars, according to Miller Samuel Inc. and brokerage Douglas Elliman Real Estate.

Rents rose 10.7% year-over-year to $4,095 in February from $3,700 the same month a year earlier.

“Every couple of months the market sees some sort of record,” Miller Samuel President Jonathan Miller said. “What's different is, instead of rising sharply upward, it's just pressing against the record levels every month. Sometimes it exceeds it and sometimes it doesn't. 

“The takeaway from that is that rents, since the summer, don't appear to show any signs of declining,” he added. 

In Manhattan, listing inventory fell month-over-month at a higher rate than the February average over the last 10 years. The number of new leases rose year-over-year by 43.5%, the biggest annual increase in new leases in the last 19 months. Higher mortgage rates drove up the cost of buying and pushed many prospective homeowners into rentals.

“We're seeing activity expand a lot faster than we would normally expect seasonally. That's an indicator of the impact that rising mortgage rates are having on would-be homebuyers into the rental market,” Miller said. 

Brooklyn and Northwest Queens Follow Manhattan Trends

Brooklyn's median rent rose 17.2% year-over-year to $3,400, and the growth doesn't appear to be letting up anytime soon, according to Miller. 

“One out of five rentals rented for more than a landmark (rate)," Miller said. "So the market remains very tight. Rental price growth is either setting records or flirting with records every month. And we're going into the spring market, where activity is expected to accelerate through the spring and peak in the summer. I would not be surprised to see some records being set in the coming months.”  

At the same time, new leases rose 18.9% year-over-year and almost 40% in February from the previous month. Miller said the large monthly hike isn't typical. 

“On a month-to-month basis, our leasing activity is up almost 39% and we would expect a 5% to 10% expansion from January to February," he said. "So the market is very, very strong with lots of potential demand,”

In Northwest Queens, median rents rose to the highest for a February on record and second-highest of all time. Two-year leases made up a larger part of the market than ever before, signaling interest from renters in locking in a rate before prices climb further. 

The median rent rose 12.1% year-over-year to $3,238. 

“Essentially, all three markets are doing the same thing this particular month, where they're seeing at or near-record prices, but effectively moving sideways to a record set in the summer,” Miller said. “Leasing activity is relatively high and we're seeing inventory relatively low. So that combination is creating a fairly robust New York City rental market.” 

Article Sources
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  1. The Elliman Report, "January 2023, Manhattan, Brooklyn and Queens Rentals."

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