Manhattan rents have soared to an all-time high of more than $4,000 as rising interest rates squeezed the market.
The New York City neighborhood saw an increase of 10.7 percent year-over-year to reach an average of $4,043 per month in February, or an average median of $5,186. New York City as a whole has a median monthly rent of $2,141.
Manhattan was about 40 percent more expensive than living in Los Angeles, which has a median monthly rent of $2,600. California dominates the top ten with San Jose, San Francisco and San Diego all with median rents above $2,000.
After New York, Boston is the most expensive to live on the East Coast at an average of $1,950.
Jonathan Miller of real estate agent Douglas Elliman said: “Prices hold at or near record levels as new lease levels rise and rising mortgage rates push potential homebuyers into the rental market.” .
The New York City neighborhood saw an increase of 10.7 percent year-over-year to hit an average of $4,043 per month in February. The average median was $5,186, while the city as a whole has a median monthly rent of $2,141. Manhattan was about 40 percent more expensive than living in Los Angeles, which has a median monthly rent of $2,600. California dominates the top ten with San Jose, San Francisco and San Diego all with median rents above $2,000.
Manhattan was about 40 percent more expensive than living in Los Angeles, which has a median monthly rent of $2,600.
There were 4,037 new leases signed last month in Manhattan, increasing 43.5 percent year-over-year. Compared to January, the number of new leases rose 17.3 percent, according to the Douglas Elliman report.
Miller predicted even higher rents for the municipality in the coming months as the Fed is likely to raise rent interest further while the local economy remains strong.
Large apartments with three or more bedrooms are in high demand, according to a separate report from the Corcoran Group.
Median rent for studios, one- and two-bedroom apartments increased 5 to 6 percent this time last year, while price rose 13 percent for apartments with three or more bedrooms to an average of $9,592 per month.
The Chelsea/Flatiron neighborhood saw the biggest jump in 2021, up 10 percent to $6,904 in February. SoHo/Tribeca remained the most expensive with residents spending an average of $10,115 per month, up 5 percent from last year.
Although rents remain painfully high for many Americans, the cost to apartment dwellers is falling across the country after skyrocketing in recent years.
The U.S. median rent rose 2.4 percent in January from a year earlier to $1,942, the lowest annual increase since June 2021, according to data from Rent, which tracks apartment and home listings for rent.
Median rent peaked in August at $2,053, while the annual growth rate peaked at nearly 18% in March of last year, according to Rent.
On a monthly basis, the national median income for January was down 2 percent from December, its fourth drop in five months, the company said.
After rising in 2021 and most of 2022, rental growth has begun to moderate amid slowing demand and increasing competition from new apartment construction, which has put pressure on landlords to cut prices. rent increases.
“It’s the inventory, the fact that rents have been so high, a lot of people are unsure about the economy and it just stays where it is, it doesn’t move around as much,” said Jon Leckie, a researcher at Rent.
Even with rent growth moderating, the sharp increases in recent years have squeezed renters’ budgets by absorbing more of their income.
A view of the downtown Los Angeles skyline as seen from Kenneth Hahn Park as a winter storm sweeps through California on February 26, 2023
SAN FRANCISCO: California dominates the top ten with San Jose, San Francisco and San Diego all with median rents over $2,000
The national median rent-to-income ratio reached 30 percent in the fourth quarter, according to Moody’s Analytics. That ratio was the highest in the more than 20 years Moody’s has been tracking it.
The US Department of Housing and Urban Development considers households that pay 30 percent or more of their income for rent to be “cost-burdened.”
“As the disparity between income growth and income growth widens, Americans’ wallets are feeling financial strain as wage growth lags income growth,” the economists wrote. Moody’s in a January report.
The trajectory of income growth becomes much less uniform when looking at specific metropolitan areas. In many metropolitan areas of the Southeast and Midwest, rents have continued to rise sharply amid an increase in people moving there from the West and Northeast, where housing tends to be more expensive.
Median rent in the Raleigh-Cary, North Carolina, metro area soared 22.5 percent in January from a year earlier, while in Cleveland-Elyria, Ohio, it rose 17.5 percent, according to Rent .
Among the metro areas where median rents fell the most in January from a year earlier: Phoenix-Mesa-Chandler, Arizona, was down 6.7 percent, and Oklahoma City, was down 6.3 percent.
Nationwide rents are unlikely to fall sharply as housing demand remains strong and high mortgage rates that plunged the home-to-buyer market are forcing many prospective buyers to continue renting.
“What will happen is that when we get back into the warmer months, people will start moving again and they will see the demand that we lost over the winter and that will drive prices back up again,” Leckie said.