What Does the NYC Rental Market Look Like?

The Weekly Recap

Good morning and happy Friday! Banks made an insane amount of money in Q4, Wall Street thinks US homes are overpriced, US unemployment fell to 4.1% in a blowout jobs report, TikTok may go dark in the US on Sunday, if you’re already tired of congestion pricing you can fly Blade for $95 and like a good neighbor, State Farm is… cancelling its Super Bowl commercial after ending coverage for fire damage in LA last year.

If you missed last weeks newsletter We Survived to ‘25… So What’s Next for Real Estate, you can read that through the link.

What Does the NYC Rental Market Look Like?

All real estate markets are intertwined. Whether you are a buyer, seller or renter, whatever is occurring in one of those segments impacts the other. As rates remain stubbornly high for buyers its having an impact on those who exist within the rental marketplace. The median asking rent in NYC was $3,600 in December, almost 3% higher YoY but it remains unchanged since November which is indicative of a steady marketplace.

Rental inventory has fallen the last two months which has been the first consecutive monthly decline since October of 2022. With the decrease in supply, even in a historically slow seasonal cycle, demand for homes may create an upward pressure in pricing moving into the spring. In a marketplace that is experiencing low vacancy rates and limited supply, new construction is where the primary source of new inventory is coming from. With new construction comes new concessions for renters as buildings try to reach full occupancy as quickly as possible. There are now 22% of rentals across the city that are offering at least one month of free rent concession in the month December. That figure is the most since peak Covid in July 2021. It is also a 4% increase YoY in concession availability from December of 2023.

Brooklyn and Queens are emerging as key rental markets as they become a stronger pocket of value for renters where rent increases have been slowing compared to Manhattan which has seen pricing accelerate. The inventory in Manhattan specifically has declined sharply as elevated mortgage rates have kept would-be buyers in the rental market, absorbing more supply.

Market Performance

Here are how some other indexes and asset classes have performed as of this morning’s opening bell.

NYC Market Update

Here is a view of new inventory that has come onto the NYC market over the past WEEK as well as newly signed contracts in Manhattan. More inventory has hit the market in the new year.

Mortgage Rate Update

Mortgage rates ticked up for the fifth consecutive week and crossed seven percent for the first time since May 2024. The continued strength of the economy is continuing to impact the bond markets and driving rates higher. Despite the rising rates, if you are in the market for a mortgage you are able to get lower borrowing costs by quote shopping and having banks compete for your business.

News You Can Use

• Wall Street Soars on Record Bank Profits and Cooling Inflation CNN

• Banks Hand $100 Billion to Shareholders, Most Since 2021 Bloomberg

• Wall Street Bankers Say Merger Outlook Has Already Jumped in 2025 Reuters

• US Inflation Data to Remain Firm Bloomberg

• Wall Street Thinks U.S. Homes Are Overpriced Wall Street Journal

• There’s Been a ‘Meaningful Shift’ in CEO Confidence Since Trumps Election, says Goldman’s Solomon CNBC

• US Payrolls Grew by 256,000 in December, Much More than Expected CNBC

• Big US Banks Set for $31 Billion Quarterly Profits as Wall Street Business Booms Financial Times

• Core Inflation Rate Slows to 3.2% CNBC

• Wholesale Prices Rose 0.2% in December, Less Than Expected CNBC

• JPMorgan Notches Another Record Year for Profits Yahoo Finance 

• US Unemployment Fell to 4.1% in a Blowout Jobs Report Reuters

• NYC Commuters Get New Way to Dodge Traffic Bloomberg

• State Farm Cancels It’s Super Bowl Ad, Citing Los Angeles Fires Wall Street Journal

The Deep Insight

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