The New York City Economy Tracker is a joint project between Investopedia and NY1, where we use publicly available data to evaluate the economic health of the city across a variety of metrics.
For the week of February 13, 2023, we’re looking into New York City’s rental market, analyzing median rents and rental trends by borough.
Median Rents Have Fallen Faster Than in Other Cities, But Remain Very High
Median rents in New York City have fallen 9% from their peak in August of 2022, according to data from Apartment List. This is a much faster decline than in other major U.S. cities. By comparison, rents in Chicago have fallen 4.1% from their peak last summer, while those in Phoenix have fallen 3.9%. Los Angeles and Houston have recorded even smaller declines, with median rents falling just 2.6% and 1.6%, respectively, from their summer peaks.
Despite the larger percentage decline, median rents in New York City remain far above those in other cities. As of January, the median rental cost in New York City was $2,024 a month, which was 8% higher than the median rent in Los Angeles, 37% more expensive than Phoenix, 47.5% pricier than Chicago, and a stunning 66% above that of Houston.
Asking Rents in New York City Remain Elevated On an Annual Basis
Another way to look at rental costs is through asking rents, which refers to the original price listed for a unit on rental websites, and is an indicator of what landlords are asking in the current market. Asking rents tend to be higher than the final cost a tenant pays when agreeing to sign a lease, as prices can be negotiated lower, and rental costs tend to fall the longer an available unit sits on the market. This effect is more pronounced during the fall and winter months, when rental demand is lower from a seasonal perspective.
Asking rents in Manhattan remain substantially elevated, up 18% year-over-year as of December. By comparison, asking rents in Brooklyn and Queens are up a bit less, rising 15% and 13% year-over-year, respectively. Asking rents in the Bronx recorded the smallest increase at 7%, while those in Staten Island fell 2% compared to the same period of 2021.
While asking rents are still up by double digits on an annual basis, the picture changes when we compare current prices relative to their peaks last summer. Median asking rents in Brooklyn and the Bronx were down 1.9% and 2.1%, respectively, from their peaks in September and July of last year. Median rents in Queens and Staten Island recorded even larger declines, falling 8.8% and 11.3% from their respective peaks in August and September of 2022. The declines in rental prices across the four outer boroughs mirror a national trend of falling rents since last summer.
By contrast, median asking rents in Manhattan remained unchanged at $4,150. Manhattan is the only borough where rents haven’t declined from their summer highs, indicating that prices there remain sticky as landlords have been more resistant to marking down prices amid falling overall rent.