Rents in New York City rose to record levels, bucking the national trend

Rents are falling across the country. But New York City is not the rest of the country.

Rents in the city remained high in October, despite expected seasonal trends and declining mortgage rates. The average rent for a new, mediated lease at market rent in Manhattan was $4,600 in October, according to a monthly report from appraisal firm Miller Samuel for Douglas Elliman.

That was an increase of $50 from September, but a 7 percent increase year over year.

Although rents have fallen across the country, rents in New York City are being boosted by a strong local economy, according to report author Jonathan Miller.

Rents rising faster than inflation can be good for landlords who see costs rising. But higher rents have also contributed to concerns about affordability, a cornerstone of newcomer Zohran Mamdani’s successful campaign.

“Rents are still growing more than twice as fast as inflation,” Miller said. “That perfectly reflects the affordability crisis in housing.”

The average rent in Manhattan hit a record in February and remained high throughout the summer, peaking at $4,700 in July. That was likely due in part to higher mortgage rates keeping potential buyers in the rental market, Miller said.

The trend was similar in Brooklyn and Northwest Queens. Average rents for a new market-rate lease in these areas reached $3,850 and $3,598, respectively, in October. Average rents rose 6.9 percent year over year in Brooklyn and 7.4 percent year over year in Northwest Queens.

While average rents in the city tend to drop with cooler weather and declining demand, that hasn’t quite happened yet. October matched August’s median for the third-highest rent in Manhattan ever. Nearly 18 percent of Manhattan leases were signed after a bidding war, up one percentage point from a year ago.

That is in contrast to the national trend. Rising unemployment and moderating wage growth are contributing to weaker demand. GDP has grown, but largely driven by AI-related capital expendituresThis is evident from a report by JPMorgan. Add to that the boom in development in recent years, and you have a recipe for lower rents.

But the Big Apple has done better. The securities industry, which powers much of the city’s economy, continues to generate revenue record profitsthe state comptroller’s office said. That could contribute to a sharp increase in prices for Manhattan’s luxury market: In the top decile of listings, average rents have risen 20 percent since October last year, to $11,995.

With the election in the books and Mamdani headed to Gracie Mansion, any uncertainty in the housing market has been eliminated, Miller said. Mamdani made promoting affordability for renters a key part of his mayoral campaign and has pledged to use his power over the Rent Guidelines Board to freeze the prices of rent-stabilized apartments, nearly half of the city’s housing stock.

While that would increase affordability for those tenants, it would also likely lead to accelerated rent growth in market-rate apartments, Miller said. Landlords, faced with strong inflation in their expenses, will try to make up the difference in net income on the market rate units they own.

“We are still looking at upward pressure on rents going forward,” Miller said, “regardless of how the economy performs.”

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