Manhattan Rent Reaches Record High at $5,588

The average monthly rent in the United States has been moderating in recent months, falling by just over 1% in July compared to July 2022, according to rent.com, which analyzed census data.

But not in New York City, where rents are going in the opposite direction.

"Nearly everything we've tracked across Manhattan, Brooklyn and Queens have been at all-time highs in the month of July," said Jonathan Miller, CEO of real estate firm Samuel Miller, who wrote the report.

The spike in Manhattan is especially stark, according to the report, a collaborative effort between Samuel Miller and real estate company Douglas Elliman.

In four of the past five months, average monthly rent in the city’s largest borough has hit a record high and is now $5,588, up 9% from this time last year, the report said.

"For almost the past 12 months we've seen rents being at or near record highs," said Hal Gavzie, executive vice president of residential leasing at Douglas Elliman.

While monthly rents are not doubt on an upward trajectory, Yildiray Yildirim, director of the Steven L. Newman Real Estate Institute at Baruch College, said eye-popping figures like rent averages don't always tell the full story.

An apartment leasing for an outrageously large sum (such as a $125,000 per month apartment in Soho) can pull the average in a more expensive direction and make monthly payments look larger than they are, he said.

The median rent of $4,400 per month is a more representative figure, Yildirim said.

"The average is good in terms of understanding the perspective of the rent increases," he said. "But looking at the median is more robust."

Although both figures show that rental housing in the nation's largest city is growing less affordable.

The real estate report’s author sees no relief for renters in the near future, but says the increases should at least flatten out in coming months. 

The price comes even as New York’s population has declined during the COVID pandemic. Some 400,000 residents departed the city between June 2020 and June 2022, according to census data.

Renters, however, tend to stay in their apartments to avoid bigger increases and high interest rates are re-directing would-be home buyers into rented apartments, both of which push up rental rates, Gavzie said

"Current renters are looking at where the rents are now and saying 'it's a savings for me to renew my current lease even with an increase, as opposed to incurring the expense of moving,'" he said.

But the city may finally be reaching a tipping point, Miller said. Apartment inventory rose by 11% in July compared with July 2022, and the number of new leases signed declined 6% year-over-year.

"Leasing activity usually peaks in the summer," Miller said. "August tends to be the highest no matter how weak or strong the market, but what we saw in July was leasing activity fall or slow."

August could bring spurt of activity as students look for apartments for the upcoming school year and recent college graduates settle in to their first post-college apartments, Gavzie said.

But Miller sees price increases flattening in the fall. "There are signs that the (Federal Reserve) might be near the end of raising interest rates," he said. "Once rates stabilize, that means less pressure on the rental markets, which means rents are unlikely to see rapid growth."