Rents are climbing once again, with Manhattan’s median rent rising 6.4% year-over-year to $4,500. This marks the fifth consecutive increase across the Manhattan, Brooklyn, and Queens rental markets—an unusual trend for February, typically a slower period. However, bidding wars have continued to drive prices higher in both Manhattan and Brooklyn.
The luxury sector has also seen a sharp uptick, with median rent jumping 8.4% to $10,600. The price per square foot is now at a record-high $104.86, reflecting a 14.6% increase from last year.
Some of this demand may stem from prospective buyers who are still holding off for lower mortgage rates. But as I’ve noted before, the historically low rates seen after the pandemic are unlikely to return. Rent spikes are typically expected in the summer, making this early-year increase particularly notable. Jonathan Miller, president and CEO of Miller Samuel, points out, “If we’re setting records in February, we could see further records this summer if economic factors don’t change.”
Interestingly, non-doorman buildings appear to be experiencing faster rent growth than doorman buildings. Many renters seem more focused on upgraded apartments with features like in-unit washer/dryers and larger rooms, opting for these conveniences over amenities such as doormen or fitness centers.
On the flip side, many buyers have accepted that the ultra-low 2–3% mortgage rates of the pandemic were a rare anomaly, as I mentioned last month. With interest rates continuing to decline—the average 30-year fixed rate is now down to 6.67%, its lowest since October—mortgage applications are rising and could continue to do so if rates stabilize below 7%.
At the same time, market uncertainty remains, particularly with ongoing volatility and the looming threat of tariffs. This continues to weigh on the decision of whether to buy or rent. Either way, I’d be happy to sit down or hop on a call to discuss your real estate options if you’re considering a move.