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NY rents cooled slightly in June. But a heat wave is coming

After three straight months of record prices, rents last month fell 2 percent

(Getty)
(Getty)

After three straight months of smashing records, Manhattan rents took a breather in June.

The borough’s median rent slipped 2.2 percent month over month, landing at $4,300, according to a report by the appraiser Jonathan Miller for Douglas Elliman.

New York’s net effective median rent — the price on units with concessions — also dipped, falling 2.1 percent to settle at $4,268. 

But those downticks don’t signal the start of a trend, Miller said. Instead, the appraiser described it as “a blip.” 

Summer is historically the busiest rental season and strong demand coupled with limited supply will likely push prices higher over the coming months. 

Renters signed 2.5 percent more leases in June than May, and Manhattan’s vacancy rate remained under 3 percent for the month, signaling leasing activity is still strong.

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“I think it’s possible to see an increase or record set in one or both of the next two months,” Miller said, referring to rental prices in July and August.

Prices in Brooklyn and Queens showed no sign of a slowdown. The median rent in Kings County topped previous highs for the third consecutive month and reached just above $3,550. Northwest Queens prices also notched a new record with a median rent of about $3,575.

Those relentless gains could level off come fall, Miller said. But that hinges on the Federal Reserve’s appetite for another rate pause.

Economists have penciled in another hike at the Fed’s July meeting, an increase that will likely push mortgage rates higher and sideline another slice of prospective homeowners. Some of those would-be buyers will remain renters, stoking demand that could further boost rents.

But experts project the Fed could hold rates steady through the remainder of the year, according to Bankrate. 

“That may keep rents stable in the fall as fewer would-be homebuyers are pushed into the rental market,” Miller said.

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Douglas EllimanJonathan MillerMultifamily MarketRents