In a repeat performance, New York City rents jumped in June to hit a record for the month — one first notched in June 2023.
That early season pop signals prices could beat last summer’s records.
Manhattan rents landed at $4,300 last month, the same price posted a year ago and a 1.2 percent increase over May rates, according to report for Douglas Elliman by appraiser Jonathan Miller.
Competition kicked into overdrive as the market’s share of bidding wars notched a new record. Listings lasted just 24 days on the market on average, the shortest period on record.
The usual suspects — high mortgage rates, supply constraints and seasonal demand — fanned those flames.
Mortgage rates stuck around 7 percent have pushed would-be buyers to hold on to their rentals, compounding the city’s housing crunch. Pile on the seasonal surge in apartment searches and you’ve got rents tracking to top last summer’s highs when prices topped out at $4,400 in July and August 2023.
“It’s highly possible that not only will rents rise in the next two months, but they could exceed last year’s record summer,” Miller said.
In Brooklyn, price moves mimicked Manhattan’s, notching a high for the month at a median $3,695. Apartments spent even fewer days on the market than those in the city —18 — and renters signed new leases at the second-highest level on record.
Queens rents settled at $3,250, the second-highest level for June. New lease signings, like in Brooklyn, rose to the second-highest level ever.
If renters are to see any relief it will likely come in the fall by way of the Federal Reserve’s long-awaited rate cuts, Miller said.
Rents typically ebb in autumn and the market now expects Fed Chair Jay Powell to cut rates in September given recent data showing inflation and the jobs market are cooling — signs higher-for-longer rates have worked their magic.
The Federal Funds Rate influences mortgage rates. So if the former falls, would-be homebuyers may jump into the sales market, relieving some of the pressure on rentals.
Still, tenants shouldn’t hold their breath for major price declines.
“Because the Fed is not expected to make significant cuts, the impact on rent trends will probably be modest,” Miller said.
“In other words, the affordability of rent levels is not expected to improve dramatically,” he added.
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