Real Estate

NYC Rents Hit Record $4,300 in June, Brooklyn and Queens Also Surge

NYC rents hit record highs in June with Manhattan at $4,300, Brooklyn at $3,695, and Queens at $3,250.

By Tal Alexander

7/11, 07:05 EDT

Key Takeaway

  • NYC rents hit a record $4,300 in June, up 1.2% from May, driven by high mortgage rates and seasonal demand.
  • Brooklyn and Queens also saw record-high rents at $3,695 and $3,250 respectively; listings lasted just 18 days in Brooklyn.
  • Potential Fed rate cuts in September may offer slight relief but significant rent declines are unlikely.

NYC Rents Surge to Record Highs

In a repeat performance, New York City rents surged in June, hitting a record high for the month, a milestone first achieved in June 2023. Manhattan rents reached $4,300, a 1.2 percent increase over May rates, according to a report by Douglas Elliman and appraiser Jonathan Miller. This early season spike suggests that prices could surpass last summer’s records, driven by high mortgage rates, supply constraints, and seasonal demand. Listings lasted just 24 days on average, the shortest period on record, as competition intensified with a new high in bidding wars.

The Competitive Rental Market

The Manhattan rental market has become fiercely competitive, with 24% of leases signed after bidding wars in June, a record high since tracking began in 2021. Renters paid a premium of 1.4% above listing prices on average, reflecting the intense pressure on apartment hunters. Despite the competition, rents held steady, with the median price for new Manhattan leases at $4,300, unchanged from a year earlier. An ample supply of available units helped keep prices in check, but the market's dynamics suggest that prices could rise higher, potentially reaching record levels again this summer.

Brooklyn and Queens Follow Suit

Brooklyn and Queens mirrored Manhattan's rental trends, with Brooklyn rents hitting a median of $3,695 and Queens at $3,250, both setting records for June. Apartments in Brooklyn spent even fewer days on the market than those in Manhattan, averaging just 18 days. New lease signings in both boroughs rose to the second-highest level ever, indicating strong demand. The substantial churn in the market, with renters moving rather than accepting price hikes, has added to the available inventory, keeping rents from skyrocketing further.

Broader Implications for the Housing Market

The surge in NYC rents highlights broader trends in the housing market, particularly the impact of high mortgage rates and supply constraints. With mortgage rates around 7 percent, many would-be buyers are holding on to their rentals, exacerbating the housing crunch. The Federal Reserve's anticipated rate cuts in the fall could provide some relief, potentially easing pressure on rentals as more buyers enter the sales market. However, significant rent declines are unlikely, as the Fed is not expected to make substantial cuts, meaning affordability issues will persist.

Street Views

  • Jonathan Miller, Douglas Elliman (Cautiously Optimistic on NYC rental market):

    "It’s highly possible that not only will rents rise in the next two months, but they could exceed last year’s record summer."

  • Jonathan Miller, Douglas Elliman (Neutral on rent relief due to Fed rate cuts):

    "Because the Fed is not expected to make significant cuts, the impact on rent trends will probably be modest. In other words, the affordability of rent levels is not expected to improve dramatically."