New York City’s rental inventory is increasing, StreetEasy says

The NYC rental market has seen many changes since the COVID-19 pandemic broke out in the city. In the spring of 2020, the exodus of New York City residents drove rents down. In 2021, many of those who left returned to the city, and a year later, the rise in mortgage rates pushed renters and some would-be-buyers to compete for the limited rental inventory. 

By the end of 2022, the number of apartments available for rent in New York City finally began to increase, according to recent findings from StreetEasy. There were 25,865 units listed for rent in New York City in December 2022, up 2.6 percent from a year ago. However, this increase in rental inventory does not lead to any significant changes in the rental prices. Typical asking rents went down 0.2 percent between November and December of 2022 but were 14 percent higher than in 2021.  

The rising borrowing costs cooled down the once red-hot NYC housing market. Home prices are no longer rising as fast as they did at the beginning of last year, and fewer listings go into contract. However, while homebuyers’ demand has decreased, the asking prices remain near record levels. The high housing costs make renting a more appealing option to some would-be-buyers. 

“Higher mortgage rates have diminished the purchasing power of would-be home buyers by making monthly mortgage payments more expensive,” Kenny Lee, the author of the report, wrote. “But for priced-out buyers, waiting in market-rate rentals can also be costly, as elevated rents make it significantly more challenging to save up for a down payment.”

The COVID-19 pandemic has also had an impact on the popularity of some NYC neighborhoods. Remote work increased the flexibility of New Yorkers when choosing where to live. The traditionally-in-demand West Village and Greenwich Village saw a 12 percent and 10 percent slowdown in year-over-year growth in median asking rents. In addition, Manhattan had the highest share of price adjustments among the five NYC boroughs. One in five listings in this borough lowered their initial asking rents in December 2022. 

“Rising inventory, in addition to increasing shares of rental listings cutting asking rents and offering concessions, means some reprieve for NYC renters,” the report said. “While still close to an all-time high, asking rents will continue to decline this year as the rental market continues to rebalance. At a minimum, renters can expect a less competitive rental market this spring and summer compared to 2022.”

Resources:

“NYC Rental Inventory Rises for the Second Month,” by Kenny Lee (StreetEasy, 2023)

“Apartments Are Finally Returning To NYC's Rental Market, Study Finds,” by Matt Troutman (Patch, 2023)