The average rental price in Manhattan surpassed $5,000 per month in June for the first time in history, according to new data.
According to a new June report from brokerage firm Douglas Elliman and Miller Samuel Real Estate Appraisers and Consultants, the average rent in Manhattan reached $5,058, up 1.7% from May when the average rent was still at an elevated $4,975.
However, its up nearly 30% since June 2021, when the average rent was $3,922, according to the report.
Last month’s average rent not only exceeded “the $5,000 threshold for the first time,” but also set “a new record for the third time in five months,” according to the brokerage firm.
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Even though lease signings rose from May, they dropped nearly 50% since June 2021.
The issue is that mortgage rates, which are “surging after the pivot in the Fed policy this spring,” are pushing more consumers out of the homebuying market, Miller Samuel CEO Jonathan Miller told FOX Business.
Mortgage buyer Freddie Mac reported Thursday that the 30-year rate rose to 5.51% from 5.30% last week. One year ago the average 30-year rate was 2.88%.
“Because mortgage underwriting hasn’t normalized, remaining tighter than normal since the great financial crisis, would-be home buyers priced out of the market are being pushed into the already tight rental market, making it even tighter,” Miller added.
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On top of that, “New York City leasing season doesn’t peak until August, so we anticipate more demand in the coming months, pushing rents up further,” he said.
According to the June report, the average monthly rent for a three-bedroom apartment in Manhattan was $9,469, up from $7,394 last June.
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Meanwhile, the average monthly rental price reached $5,722 for a two-bedroom apartment, up from $4,890 a year ago. The average monthly rental price for a one-bedroom apartment was $4,278, up from $3,475 a year ago.
People seeking rentals in Brooklyn or Queens, boroughs of New York City, didn’t get much of a break either.
The average monthly rent in Brooklyn reached $3,822, up from $3,185 a year prior, according to the report. In northwest Queens, the average monthly rental price surged to $3,352, up from $2,913 a year ago.
The Associated Press contributed to this report.