Average rent in Manhattan climbs to $5,000 a month

While the New York City home sales market is cooling off, rents continue to set new records. In June, the average rent in Manhattan reached $5,058 a month. This is a new historic high, and there are no signs of rent prices going down anytime soon. 

The average rent went up 29 percent from last year, according to the report prepared by the appraisal firm Miller Samuel Inc. However, expensive rents seem to have little to no effect on demand. The vacancy rate in Manhattan remains under 2 percent, and new lease signings continue to increase for five consecutive months. Jonathan Miller, CEO of Miller Samuel, attributes high rents and demand to the significant increase in mortgage rates. 

“The spike in mortgage rates has immediately tipped people on the margin into the rental market,” Miller told The Real Deal. “And the rental market was already tight before rates began to jump.”

Currently, the interest rates for a 30-year loan average 5.51 percent, the highest since 2009, according to the data from Freddie Mac. Although the borrowing costs remain below inflation, which climbed to 9.1 percent in June, some would-be-buyers prefer to return to the rental market. 

The average rent in Brooklyn has also increased. Now, it sits at $3,822 a month, up 20 percent from last year. The number of new leases continues to rise month over month, and bidding wars occur in more than one out of five leases. 

Rents in Northwest Queens have gone up since last year, but they remain more affordable than those in Manhattan and Brooklyn. In June, the average rental price in this area reached $3,352 a month. This is a 15 percent increase from 2021. New lease signings fell annually but stayed above the pre-pandemic levels.

Resources:

“Elliman Report: Manhattan, Brooklyn & Queens Rentals 6-2022,” (Miller Samuel Inc., 2022)

“‘Barring a recession,’ record-breaking NYC rents will keep rising,” by Suzannah Cavanaugh (The Real Deal, 2022)

“Average rent in Manhattan was a record $5,000 last month,” by Robert Frank (CNBC, 2022)