2024 NYC Housing Market Predictions

New Yorkers will see a calmer rental market in 2024, after inventory shortages led to strong competition for rentals this year. As inventory rises further next year, citywide rent growth will slow, although a sharp drop is unlikely due to still-limited inventory compared to pre-pandemic levels. That said, New York City renters will find relief in the most unexpected place: Manhattan. Asking rents will likely come down from high levels in the borough amid rising inventory, as landlords will have more reason to compete with each other on prices to attract tenants.

Meanwhile, the NYC sales market set a new record in 2023: the citywide median asking price rose to $1.1M — the highest since 2017 — despite higher mortgage rates. Sellers will need to adopt a competitive pricing strategy, however, as the pool of would-be buyers will remain limited. As sellers adjust to elevated mortgage rates, asking prices will likely dip below $1M in 2024. One beneficiary of higher mortgage rates might be new developments. Due to low resale listing inventory and high renovation costs, new amenity-rich condos will be a hot commodity as buyers seek out move-in ready homes.

1. Rising Inventory Will Slow Rent Growth — But Don’t Expect Rents to Fall

Soaring asking rents in 2023 resulted in another challenging year for NYC renters. Median asking rents rose 9.3% this year, albeit a smaller jump compared to the 28% increase in 2022. Higher rents are pulling more homes onto the market as rentals, as owners pivot to renting their properties instead of selling. The number of rental listings jumped 8.8% this year after dropping 36.4% last year. This inventory growth will continue in 2024, as elevated rents and high mortgage rates encourage more owners to rent their space. With rising inventory, it will be more challenging for landlords to raise rents significantly above market rates in 2024. Renters will have more listings to consider when deciding whether to renew their current lease or find a new place.

Nevertheless, renter demand will continue to outpace supply, making it unlikely for rents to fall. Despite the recent increases, this year’s rental inventory remains 16.2% below its pre-pandemic level in 2019. To fully reverse this post-2019 decline, the city would need at least 40,000 more rentals to join the market in 2024 — equivalent to 19.2% of the more than 208,115 rentals on the market in 2023. This appears unlikely, as inventory rose by only about 21,000 per year on average between 2017 and 2019. All this considered, year-over-year rent growth will likely fall below 5% in 2024.

2. Manhattan Rents Will Decline, Winning Back Renters

With affordability as their most important consideration, NYC renters looked farther from Manhattan in 2023. Due to its relatively lower price point, Queens overtook Brooklyn as the most competitive rental market in spring 2023. Rising demand and limited inventory is behind the strong competition for rentals in Queens, the only borough where rental inventory stagnated in 2023 compared to 2022. 

In 2024, Manhattan will be back on renters’ radars as asking rents decline. The median asking rent in Manhattan peaked at $4,395 in April 2023: the highest on StreetEasy® record stretching back to 2010. Soaring rents drew more rentals onto the market and resulted in a 15.9% year-over-year increase in the borough’s inventory in 2023. As landlords in Manhattan compete to fill up vacant units in 2024, more listings will offer concessions and asking rents will dip from their elevated levels in 2023. In an early sign of demand resurgence, rental listings in Manhattan were saved close to eight million times on StreetEasy in 2023, holding steady from 2022. As New Yorkers return to Manhattan, well-priced rental listings in the borough will likely see a jump in saves and inquiries in 2024.

With hybrid work taking hold, Manhattan will continue to lead the demand for rentals in neighborhoods closer to office hubs. Our national colleagues at Zillow® expect other urban rental markets across the country to follow Manhattan’s lead and experience rising demand near downtown areas.

3. New, Amenity-Rich Condos Will Be the Market’s Hottest Commodity

New Yorkers remained willing to pay up for move-in ready homes in brand new buildings this year. Sponsor units in new developments, on average, sold at prices 23.6% above comparable previously-owned condos in 2023. “Amenity-rich” sponsor condos that offer in-unit laundry, a dishwasher, an elevator, and a doorman — four of the top five must-have amenities in NYC based on StreetEasy search data — in addition to a gym or pool in the building sold for 37.4% above similar resale condos without these sought-after amenities.

Despite the high premium, amenity-rich condos will grow in popularity in 2024. Many homeowners locked into low mortgage rates are sitting on the sidelines, leading to 15% fewer NYC homes being listed for sale in 2023 than in 2022. Resale listing inventory will remain limited in 2024, with mortgage rates expected to stay above 6%. Against this backdrop, home shoppers will increasingly consider condos in newly-constructed buildings.

Furthermore, higher mortgage rates as well as labor and material costs have made it more expensive to take on home renovations. These conditions make move-in ready condos attractive to home shoppers with limited room to stretch their budgets. On the other hand, the supply of new developments is poised to slow over the coming years, driving up competition among buyers. StreetEasy analysis of NYC data shows just 181 permits were given to new multifamily buildings with more than three units in the first half of 2023, a 74% decline from the first half of 2022. The decline from 2022 follows a surge in new permits, driven by developers rushing to qualify their projects for the Affordable New York Housing partial tax exemption (commonly known as 421-a) before it expired in June 2022. Even so, the number of newly-permitted projects in the first half of 2023 was still 26.4% below its three-year (2017-2019) average before the pandemic.

4. Asking Prices Will Moderate as Buyers and Sellers Come to Terms With Higher Mortgage Rates

With much higher price points than the rest of the country, selling a home in the city has never been easy. In October 2023, the median asking price of an NYC home was $1.1M — nearly triple that of the national market, according to our colleagues at Zillow. Adding to the challenge are elevated mortgage rates. By October 2023, the monthly mortgage payment on a median-priced home in NYC had soared 84.6% to $6,226 since January 2022. With a smaller pool of buyers who can afford to stay in the market, sellers will have to increasingly prioritize competition above aspiration in 2024.

As sellers come to terms with a market shaped by persistently high mortgage rates in 2024, asking prices will likely fall modestly below $1M — the threshold that triggers the so-called mansion tax in New York City. A little more than one in three (35.7%) previously-owned NYC homes listed for sale last year were taken off the market without finding a buyer. The homes that did sell stood out for their pricing: StreetEasy research shows that each additional percent above the price of comparable homes led to a 9% increase in a home’s probability of being pulled from the market without selling.

However, the reserve of motivated buyers will keep the NYC market in balance and prevent a sharper drop in asking prices. Mortgage rates will gradually fall below 7% in 2024, helping more home shoppers emerge from the sidelines. While lower rates will encourage more homeowners — no longer wanting to delay their moves — to put their homes on the market at a broader range of price points, this will not be enough to tilt the balance of power towards buyers.