Key Takeaways:
- The median asking rent in August rose just $20 from a year ago, as slowing demand and rising inventory cooled competition among renters in the city.
- Peak NYC rental season has moved up to April in recent years, as renters have begun their searches earlier to get a head start on the summertime competition.
- While competition is cooling in much of the city, renter demand continues to outpace inventory in Queens, resulting in a 9% year-over-year increase in asking rents.
The median asking rent in NYC was $3,800 in August, just $20 higher than a year ago and $30 lower than July. As the city’s labor market slows and rental inventory rises, competition for rentals is cooling in New York City.
Overall rental inventory rose 3.4% year-over-year to 39,730 units in August. Thanks to rising inventory and cooling demand, concessions have become more common with 14.5% of rentals offering at least one month of free rent in August, compared to 12.6% last year. The increase in rentals on the market, coupled with concessions, suggests competition among renters will continue to slow this year and next relative to recent years. However, current inventory levels remain 2.5% below what they were in 2019.
As the pace of hiring slows down, the unemployment rate in the broader NYC area has been gradually rising, according to U.S. Bureau of Labor Statistics data. The slower pace of hiring, especially in high-income industries such as finance and professional services, will continue to soften rental demand.
In addition, recent declines in mortgage rates could incentivize sidelined buyers currently renting in NYC to reconsider buying. While elevated asking prices would limit the impact of falling mortgage rates on affordability, rental demand will continue to slow as more sidelined buyers rejoin the sales market.
Manhattan Rentals Under $3,500 on StreetEasy Article continues below
Renters Aim for a Head Start to Get Ahead of the Competition
Since 2022, fierce competition has led to an earlier-than-usual peak for the city’s rental market. This year and last, the most competitive month for renters was April. Previously, July had been the time of year when competition for rentals peaked in NYC, as leases tend to lapse in summer.
In 2022, New Yorkers experienced a hyper-competitive rental market characterized by bidding wars and sharp increases in asking rents. With demand outpacing inventory, the rental market peaked in June. Since then, renters have been dialing up their home search earlier in the year than usual — likely to get ahead of the competition — while the number of listings on the market continues to peak in summer.
Between January and April this year, an average NYC renter contacted 30% more listings than during the three years before the pandemic (2017-2019). Meanwhile, there were 24% fewer rental listings across the city this year compared to pre-pandemic. As renter demand ramped up earlier than usual, the city’s rental market saw competition peak earlier in the year.
Brooklyn Rentals Under $3,000 on StreetEasy Article continues below
Inventory Rose in Brooklyn and Queens Despite Increases in Median Asking Rents
The median asking rent in Manhattan was $4,395 in August, up 2.2% from a year ago, led by increases in Midtown and Upper Manhattan. However, median asking rents on the Upper East Side and Upper West Side fell 0.5% to $3,976 and 1.8% to $4,417, respectively, from August of last year. With fewer listings entering the market, the borough’s rental inventory dropped 6% year-over-year to 19,236 units. Declining inventory helped offset softer rental demand in Manhattan, with 13.1% of rentals in the borough offering concessions, mostly unchanged from 13.2% last year.
The median asking rent in Queens jumped 9.1% year-over-year to $3,163 in August, slightly below $3,178 in July — the highest since 2010 when StreetEasy began tracking this data. Increases in asking rents were widespread across the borough. Astoria and Long Island City, which offer new developments and a convenient commute to Manhattan, both saw a 3.4% year-over-year rise to $4,395 and $2,999 in August, respectively. Neighborhoods farther from Manhattan also saw strong increases in asking rents, with Flushing, Jamaica, and Woodside leading the borough. Amid growing inventory, 14.7% of rentals in Queens offered concessions in August, up from 11.1% a year ago.
Queens Rentals Under $2,500 on StreetEasy Article continues below
In Brooklyn, the median asking rent rose 2.9% year-over-year to $3,600, the highest since 2010. Asking rents are rising quickly in northwest Brooklyn, led by Brooklyn Heights, Downtown Brooklyn, and Boerum Hill. With a 14.8% year-over-year jump in median asking rent, Brooklyn Heights saw the sharpest increase in the borough. Luxury rentals in new developments near the waterfront are likely behind the neighborhood’s higher price point of $4,650. Rental inventory also soared 17.3% from a year ago to 14,620 units across Brooklyn, contributing to cooling competition among renters in the borough. In August, 15% of Brooklyn rental listings offered concessions, higher than 11.7% the year before.
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