Manhattan residential real estate is going gangbusters.
The borough’s median monthly apartment rent, including landlord concessions, for new leases signed in March totaled a record $3,644. That’s up 0.4% from February, 23% from March 2021 and 4.8% from two years ago, at the start of the pandemic. The data come from real estate brokerage Douglas Elliman and appraiser Miller Samuel.
The rents could keep rising, said Jonathan Miller, president of Miller Samuel. “There’s a fair amount of growth in front of us, this is not a peak yet,” he told Bloomberg.
“Right now it’s ramping up into the spring and summer, and I would suspect we’re going to continue atypical rent growth until then.”
Manhattan isn’t the only place where rents are rising. In March, the Apartment List national rent index gained 0.8% from February and a hefty 17.1% year-on-year, though most of that increase came last spring and summer. The Apartment List is an online listing service for apartment rentals.
Miami Tops the List for Increases
Among major cities, Miami had the largest rent increase in the past 12 months at 30%. It’s followed by Tampa at 29%, Orlando at 28%, Phoenix at 26% and Las Vegas at 24%.
Minneapolis had the smallest rent increase over the past 12 months, at 7%. It’s followed by Pittsburgh at 9%, Detroit at 9%, Kansas City at 10%, St. Louis at 10% and Cleveland at 10%.
“So far this year, rents are growing more slowly than they did in 2021, but faster than the growth we observed in the years immediately preceding the pandemic,” The Apartment List said in its monthly rent report.
“Over the first three months of 2022, rents have increased by a total of 1.8%, but we’re just beginning to enter the busy season for the rental market, when the bulk of annual rent growth typically occurs.”
The national median rent stood at $1,333 in March, according to the report. That’s $130 more than it would have been if rent growth since the start of the pandemic matched the average growth rates of 2018 and 2019.
“Rent growth over the past year has far outpaced that of any prior year in our estimates,” though that only goes back to 2017, the Apartment List said.
Vacancies Inch Higher
To be sure, the Apartment List’s vacancy index has risen for seven consecutive months (by 0.1% on average) to 4.6%. That likely contributed to the slowdown in rent growth, the report said.
“Although the recent vacancy increase has been modest and gradual, it represents an important inflection point, signaling that tightness in the rental market is finally beginning to ease,” the report said.
Meanwhile, the latest news is bleak on the home purchase side. The 30-year fixed-rate mortgage averaged 5% in the week ended April 14, the highest since Feb. 11, 2011, according to mortgage agency Freddie Mac.
“As Americans contend with historically high inflation, the combination of rising mortgage rates, elevated home prices and tight inventory are making the pursuit of homeownership the most expensive in a generation,” Sam Khater, Freddie Mac’s chief economist, said in a statement.