Steep competition for NYC rentals propelled median rents and bidding wars in January

January brought some colder-than-usual temperatures but that was no deterrent to renters, who signed more leases for apartments last month than a year ago, sending rents higher, including a new record in Brooklyn for rent per square foot.

It was an unusually active month for renters, and the 10th consecutive month with an increase in new Manhattan leases, according to the latest edition of the Elliman Report for the Manhattan, Brooklyn, and Queens rental markets. Newly signed leases were up 27.1 percent over the previous year. December was also unusually busy for renters.

That’s because renters continue to face competition for rentals from would-be buyers as mortgage rates remain stuck, said Jonathan Miller, president and CEO of appraisal firm Miller Samuel and author of the report. This heated demand enables landlords to ask for higher rents for new leases.

Manhattan median rent rose year over year for the fourth time, increasing 4.8 percent to $4,350, according to the Elliman Report. The market share of bidding wars rose to 20.9 percent, up from 15.1 percent a year ago.

For the first time in six months, the listing discount for Manhattan rentals reflected a premium, which means the market-wide average rent that renters agreed to pay was higher than the market-wide average for asking rents, underscoring the competition Manhattan renters face.

Looking ahead to spring, renters will likely experience more of the same trends. Miller said he expects rents to continue upward unless there’s some sort of correction in mortgage rates. Since inflation increased in January, that is not likely.

Paying more for smaller units in Brooklyn

There were two records set in Brooklyn last month: Rent per square foot and bidding wars hit new highs. Rent per square foot increased 5.9 percent year over year to $57.90 last month while bidding wars saw a 31.1 percent market share—nearly one-third of all leases. (One caveat: Miller has only been tracking bidding wars for Brooklyn rentals since 2021.) Median rent $3,500 was flat compared to February 2024.

As Brooklyn rents rise, the average size of apartments for new leases continues to fall: It was 922 square feet last month, compared to 944 a year ago, indicating that renters are paying more for less space, Miller said.

Median rents are on a mostly upward trajectory, up 21 percent in Manhattan over the last five years and up 17.2 percent in Brooklyn over the same period.

“The cost of housing is becoming a larger part of renter’s income,” Miller said.

Inventory doubles in Queens

Northeast Queens median rent was up year over year for the third time in four months, rising 6.3 percent to $3,400. Lease signings were up by 34.8 percent compared to the previous year.

Listings have been increasing year over year for the past 12 months, the report said. It doubled in January.

‘Expect even higher rents’

The Corcoran Group also released Manhattan and Brooklyn rental reports for January 2025 and Gary Malin, COO at Corcoran, noted that renters face a challenging time in 2025.

“With the number of available apartments at its lowest level in 30 months and low vacancy rates, prices for tenants are being driven up,” Mailin said.

“High rents and stubbornly high interest rates have caused many New Yorkers to delay moving to a new rental or purchasing a new home. It’s simply easier to stay put. Without this turnover, inventory remains constrained. Barring a much-needed influx of new rental housing, even higher rents and increased competition for available units could be the trend as the year progresses,” he said.

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