Manhattan Rent Hits Third-Highest Number on Record

New year, same rental market.

That was the story for January rents in the city, where median rent for a brokered, market-rate lease in Manhattan was $4,695, the third-highest number on record, according to Miller Samuel’s monthly rental report for Douglas Elliman.

The median rent was up 8 percent from last year, and down just slightly from December’s numbers.

“We’re just in this mode of steadily rising rents and until we see more of a drop in mortgage rates,” said report author Jonathan Miller. “I think that trend is going to be sustained for a while.”

The luxury rental market continued to outpace the rest of the market in terms of price growth, somewhat mirroring the sales market in the city as wealthy renters or buyers continue to be able to afford higher and higher prices.

Median luxury rents — defined as rents in the top 10 percent of the market — rose over 14 percent annually to $11,500, continuing a trend that persisted through most of the back-half of last year. Brokers have previously cited a lack of high-end rentable inventory as one of the reasons rents have started to routinely push $100 or $200 per foot in that market.

Vacancy rate fell to 2.44 percent, well below the 10-year average in January, while inventory fell over 9 percent from last year. While some of the inventory disappearing may be a result of landlords pulling their listings off public markets after the passage of the FARE Act in June, the falling vacancy rate indicates that more than anything, “the market’s still tight,” said Miller.

In Brooklyn, median rent was $3,814, up 9 percent from a year ago, while new leases signed and leasing inventory were down significantly compared to last year.

In northwest Queens, including the neighborhoods of Astoria, Sunnyside, Woodside and Long Island City, median rent was up over 10 percent annually to $3,754 per month.

Miller has been closely watching the Federal Reserve’s decision-making on rate cuts, which can trickle down to lower mortgage rates. Lower mortgage rates mean more homebuyers and likely fewer renters. But after a surprisingly robust jobs report from the Bureau of Labor Statistics came out on Wednesday, the odds of relief just grew slimmer, according to Miller.

“The possibility of mortgage rates sliding seems more and more remote,” he said. “Employment popped this month higher than expected, which makes it pretty hard to cut rates.”