New York City apartment renters get a break but bargains remain elusive

NEW York rents continued ticking down in September, but apartment hunters hoping for significant relief may have a long wait.

In Manhattan, the median rent on new leases fell 3.4 per cent from a year earlier to US$4,200, brokerage Douglas Elliman Real Estate and appraiser Miller Samuel reported on Thursday (Oct 10). Prices also slipped in Brooklyn and Queens.

Rents in Manhattan have declined gradually in four of the past five months. But the median is still just US$200 shy of the record high, reached in summer of 2023, and is 20 per cent more than in September 2019, before the pandemic.

Rents tend to fall in the autumn and winter, and some “modest easing” is expected, “but not a sharp drop or price correction”, said Jonathan Miller, president of Miller Samuel. That is at least partly because the market remains fiercely competitive.

The number of newly signed leases in Manhattan surged 40 per cent from a year earlier, and bidding wars broke out in nearly a fifth of those deals.

One reason for the recent slide in prices is that cheaper mortgages have enticed some renters to leave the leasing market and purchase homes, according to Miller. But financing costs jumped this week on the heels of a surprisingly robust jobs report that undercut chances for another big interest rate cut from the Federal Reserve.

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“Think of the direction of rents in terms of the direction of the economy. Wages and employment continue to defy expectations,” Miller said. “Symbolically, the Fed rate cuts are important to the purchase market. But if mortgage rates don’t come down, it will stall the decline in rents.”

Price drops were smaller in the outer boroughs. In Brooklyn, new leases were signed last month at a median of US$3,650, down 1.4 per cent from a year earlier. In north-west Queens, an area that includes Long Island City and Astoria, the median fell less than 1 per cent to US$3,500. BLOOMBERG