Even as rents are cooling in some parts of the country, it has never cost more to rent a Manhattan apartment during the month of January as it did last month.
January is normally a slow month for housing, but median rent last month was the highest of any January on record and the third highest for any month, according to a report from Douglas Elliman, a brokerage, and Miller Samuel, an appraisal and consultant firm.
“Rents are within a whisker of the summer high, and it is only January, which is typically a weaker rental time,” said Jonathan Miller, president and CEO of Miller Samuel. “Almost every price indicator is at or near all-time records. It seems to confirm that rents aren’t going to go down.”
The median cost of renting an apartment in Manhattan was $4,097 in January. That’s up 15.4% from a year ago and up 1.2% from December.
A one bedroom had a median rent of $4,000, up 14.3% from last year, while a two bedroom had a median rent of $5,532, up 11.8%.
Since rent peaked in the summer, there was an expectation that rents would deteriorate during the fall and winter, said Miller.
But in January, as the vacancy rate slipped for the first time in nine months and the number of new leases expanded annually for the first time in three months, rent prices remained strong, climbing slightly higher than December.
“The opposite of rising rents is not necessarily falling rents, it is stabilizing rents,” Miller said. “And now rents are moving sideways, if not moving a little higher.”
Affordability continues to be a challenge across the housing market, with higher mortgage rates pushing homeownership out of reach for many people who are continuing to rent — and propelling strong demand for rentals.
On top of demand from would-be buyers from remaining renters, there is strong employment in the region keeping upward pressure on rents.
“Despite expectations, January rents certainly make the case that as long as interest rates remain as high as they are, rents could go farther up,” said Miller. “Of course, significant job loss is going to create a lower rent environment.”
Miller is calling 2023 the “year of disappointment” for those searching for housing, “because we’re not expecting a meaningful increase in affordability, barring a recession.”