Manhattan rents just hit an all-time high – again. For the third straight month, rents have reached new record highs.
The monthly rent paid by a tenant for a condo or coop in Manhattan was $3,870 in April, up 39% from a year earlier, according to a report from the brokerage firm Douglas Elliman and Miller Samuel Real Estate Appraisers and Consultants. Last year, the net effective median rent – or the amount tenants pay after factoring in incentives from landlords – was $2,791.
“There was a significant acceleration in rental prices in April, jumping nearly 40%,” said Jonathan Miller, president and CEO of Miller Samuel. He said that in the preceding six months the typical year-over-year increase was around 22%.
Inventory is also at historically low levels, added Miller. “All the excess supply that rocketed skyward in 2020 has been eliminated and there is not a lot of available inventory,” he said.
But even as the market remains tight with vacancy rates under 2% for the fifth consecutive month and listing inventory down 77% from a year ago, Miller said the surge in demand for rentals may also be influenced by what is happening in the purchase market: rising mortgage rates.
Rates for a 30-year fixed-rate mortgage climbed above 5% last month and are expected to keep rising, causing many would-be homebuyers to opt out of the market as rising monthly payments diminishes their purchasing power.
“The rise in mortgage rates has tipped people on the margin, looking to buy a home, into the rental market – a market that is already seeing record-high prices and high demand,” said Miller.