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We live in an age of inflation. Everything costs more these days and there are fewer dollars to go around. And rent is one of those constant, increasing pressures for those of us who live in New York City. In 2023, it continued to skyrocket: median asking rents rose almost 10% this year, according to StreetEasy.
With rumblings of mortgage rates falling in 2024 in the home sale market, will renters see any sort of drop or relief?
Well, kind of, according to StreetEasy.
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The real estate listing company released four predictions for NYC in 2024, which if you ask us, seem somewhat hopeful:
Rent growth will fall below 5%
There will be more apartments up for grabs in 2024 since elevated rents and high mortgage rates will force more owners to rent out their spaces. Because of this, landlords won’t be able to raise rents significantly above market rates, so renters will have more listings to consider when deciding whether to renew their current lease or find a new place, StreetEasy says.
That being said, to fully reverse the post-2019 decline in inventory, the city would need at least 40,000 more rentals to join the market in 2024 for rents to fall significantly.
Rents will decline … in Manhattan
Renters in NYC had previously looked outside of Manhattan for cheaper rents. This year, Queens actually overtook Brooklyn as the most competitive rental market, remember? But StreetEasy says people will start looking in Manhattan again.
Zillow, which is the same company as StreetEasy, says demand is “surging” for apartments a quick commute to downtown or midtown now that return-to-office is in full swing.
“Renters looking for a place near downtown will likely have more options with this year’s multi-family-construction boom, which means a huge number of new homes have hit the market,” Zillow says. “More options for renters looking for a new place means landlords who are trying to attract tenants have more reason to compete with each other on price. That’s a key reason more rental listings are offering concessions.”
New, amenity-rich condos will be hot
New apartments with “amenities” will have more people shelling out cash. It turns out in-unit laundry, a dishwasher, an elevator, and a doorman—the top must-haves in NYC based on StreetEasy search data—in addition to a gym or pool in the building will make people pay nearly 40% more.
Asking prices will fall below $1 million
The median asking price of an NYC home was $1.1 million—nearly triple that of the national market, Zillow says. That will fall in 2024 because there will be a smaller pool of buyers who can afford to stay in the market. Sellers will start lowering prices to remain competitive. Mortgage rates will gradually fall below 7% in 2024, which will help to begin to increase resale inventory across price points, StreetEasy says.