NYC renters got some relief in September as median rents drop again
- Manhattan median rent fell 3.4 percent to $4,200 as per the Elliman Report
- Bidding wars were involved in more than one in four Brooklyn lease signings
Rents dipped because of lower mortgage rates, which encouraged would-be buyers to exit the rental market, said Jonathan Miller of Miller Samuel.
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New York City median rents for new leases fell again last month and renters have a drop in mortgage rates to thank.
Manhattan median rent slid year over year for the fourth time in five months, dropping 3.4 percent to $4,200, according to the Elliman Report for the Manhattan, Brooklyn, and Queens rental markets.
Rents dipped because of lower mortgage rates, said Jonathan Miller, president and CEO of appraisal firm Miller Samuel and author of the report. Would-be buyers took advantage of more favorable rates and exited the rental market. As a result, landlords were under pressure to hold rents down to attract new renters.
It was a continuation of a trend seen in recent months. Mortgage rates started mostly falling in late July in advance of the Federal Reserve's expected cut, taking pressure off the rental market. (But just after the Fed’s September announcement, mortgage rates started climbing again.)
Rents “may not fall that much more,” Miller said. He’s not anticipating a major correction, but “rents could weaken a little more in fall and winter.”
Still, “weaken” should not be confused with “weak,” he added. That’s especially true when you’re talking about NYC rental market where bidding wars were involved in one out of five Manhattan leases last month.
Even though more inventory is coming on the market—listings increased for the 13th month, up 10.4 percent compared to September 2023—the market is not “bloated,” Miller said. The vacancy rate (2.74 percent) is nearly the same as the decade average, he said.
“The rental market is drifting toward more normal,” he said.
Renters signing leases for new developments were willing to shell out more: Median rent for new development rentals rose 8.2 percent to $5,950 while median rent for existing rentals dropped 4.1 percent to $4,100 last month.
Lease signings surged in Manhattan, Brooklyn, and Queens year over year, but were down compared to August—suggesting a slowing trend.
Lease signings rose by 40 percent in Manhattan, more than tripled in Brooklyn, and nearly tripled in Queens last month compared to September 2023. In August they were up 63.6 percent in Manhattan, and about 3.75 times in Brooklyn and Queens.
That’s pretty typical for this time of year—however the drop from August to September was more pronounced than usual, which could be the result of renters taking advantage of more favorable mortgage rates to become buyers.
Brooklyn lease signings surge again
In Brooklyn, median rent declined annually for the third time, dipping 1.4 percent to $3,650. New lease signings continued to surge, increasing 213.2 percent compared to September 2023, as per Elliman.
The number of listings rose for the eighth time, increasing by 6.7 percent year over year. Bidding wars had the third-highest market share on record, accounting for more than one in four lease signings, according to the report.
Bidding wars in Queens
In the northwest section of Queens covered by the Elliman Report, several rent metrics fell year over year. Median rent last month was $3,500, down 0.8 percent from the prior year.
Listings were up for the eighth time and bidding wars accounted for one in five lease signings.
Moving for affordability
Gary Malin, chief operating officer at The Corcoran Group, noted in his firm’s September rental market report for Brooklyn that the borough experienced its busiest September in four years. The firm also released a third quarter rental market report for Manhattan.
“Partially due to its perceived better value, [Brooklyn’s] market remains extremely busy,” Malin wrote.
“As September’s findings illustrate, New York tenants continue to seek (relative) affordability and are willing to explore new neighborhoods to find it. It will be interesting to see what happens to rents as the fall season progresses,” he said.
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