New York rents rise in February, with the average Manhattan apartment now $5,186 a month
Manhattan rents soared to an all-time high of more than $4,000 as rising interest rates squeezed the market.
The New York neighborhoods saw a 10.7 percent year-over-year increase to a median of $4,043 a month in February — or an average of $5,186. The average rent in New York City as a whole is $2,141.
Manhattan was about 40 percent more expensive than living there Los Angeleswhose average monthly rent is $2,600. California San Jose, San Francisco and San Diego dominate the top ten with median rents above $2,000.
After New York, Boston is the most expensive place to live on the East Coast, with an average cost of $1,950.
Jonathan Miller of Realtor Douglas Elliman said: “Prices remain at or near record highs as new leasing levels rise and rising mortgage rates push potential homebuyers into the rental market.”
The New York suburbs rose 10.7 percent year-over-year to an average of $4,043 a month in February. The average median price was $5,186, while the median rent for the city as a whole is $2,141. Living in Manhattan was about 40 percent more expensive than living in Los Angeles, where the average monthly rent is $2,600. California dominates the top ten with San Jose, San Francisco and San Diego all having median rents above $2,000.
Living in Manhattan was about 40 percent more expensive than living in Los Angeles, where the average monthly rent is $2,600.
Last month, 4,037 new leases were signed in Manhattan, up 43.5% year-over-year. According to a report by Douglas Elliman, the number of new leases increased by 17.3 percent compared to January.
Miller predicted even higher rents for the area in the coming months as the Fed is likely to increase interest rates further while the local economy remains robust.
Large apartments with three or more bedrooms are in high demand, according to a separate report by the Corcoran Group.
Median rents for studios, one-bedroom and two-bedroom apartments rose 5 to 6 percent compared to this time last year, while the price rose 13 percent for apartments with three bedrooms or more to $9,592 a month.
The Chelsea/Flatiron neighborhood saw the biggest jump in 2021, up 10 percent to $6,904 in February. SoHo/Tribeca remained the most expensive, with residents shelling out an average of $10,115 a month, up 5 percent from last year.
Although rents remain very high for many Americans, the cost of housing for residents is falling across the country after rising sharply in recent years.
Median U.S. rents rose 2.4 percent in January from a year earlier to $1,942, the slowest annual increase since June 2021, according to data from Rent, which tracks apartment and rental listings.
The average rent peaked in August at $2,053, while the annual growth rate reached nearly 18% last March, according to Rent.
On a monthly basis, the national average rent fell about 2 percent in January from December, the fourth decline in the past five months, the company said.
After a spike in 2021 and most of 2022, rent growth has begun to moderate amid slowing demand and increased competition from new apartment construction, forcing landlords to moderate rent growth.
“It’s inventory, the fact that rents have been so high, a lot of people are not sure about the economy and are just staying put, not moving around much,” said John Leckie, a researcher at Rent.
Even as rent growth slows, sharp increases in recent years have squeezed renters’ budgets, eating up a larger share of their incomes.
A view of the downtown Los Angeles skyline from Kenneth Hahn Park as a winter storm sweeps through California on February 26, 2023.
SAN FRANCISCO: California dominates the top 10 with San Jose, San Francisco and San Diego having median rents above $2,000
The national average rent-to-income ratio hit 30 percent in the fourth quarter, according to Moody’s Analytics. This ratio was the highest in more than 20 years that Moody’s has been tracking.
The US Department of Housing and Urban Development considers households that pay 30 percent or more of their income on rent to be “cost burdened.”
“As the gap between rent growth and income growth widens, Americans’ wallets are straining financially as wage growth lags behind rent growth,” Moody’s economists wrote in a January report.
The trajectory of rent growth becomes much less uniform when looking at specific metropolitan areas. In many metropolitan areas in the Southeast and Midwest, rents continue to rise sharply amid a surge of people moving there from the West and Northeast, where housing tends to be more expensive.
Median rents in the Raleigh-Cary, North Carolina metro area rose 22.5 percent in January from a year earlier, while in Cleveland-Elyria, Ohio, they rose 17.5 percent, according to Rent percent.
Among the metros where average rents fell the most in January from a year ago: Phoenix-Mesa-Chandler, Ariz., was down 6.7 percent, and Oklahoma City was down 6.3 percent.
National rents are unlikely to fall sharply as housing demand remains high and high mortgage rates, which have sent the home buying market into a tailspin, are forcing many would-be homebuyers to continue renting.
“What’s going to happen is when we get back into the warmer months, people start moving again and you’re going to see the demand that we lost over the winter and that’s going to push prices back up,” Leckie said.