Rising NYC rents challenge affordability despite declines elsewhere

Living in New York City requires a substantial income to afford rental housing, with the median asking rent in July reported at $3,421, according to Realtor.com®. Despite a nationwide decline in rents, New York City's rents increased by $73 from last year, marking a 2.2% rise.

"Although New York City was one of the rental markets that saw the steepest rent declines during the [COVID-19] pandemic, its median asking rent rebounded to pre-pandemic levels by spring 2022 and has continued to rise annually since then," says Realtor.com economist Jiayi Xu.

Overall, July's median rents were $413 higher than pre-pandemic times in 2019, representing a 13.7% increase. Jenny Lenz, managing director of Dolly Lenz Real Estate in Manhattan, observes that "the rental market in New York City remains very strong," noting that properties are moving quickly and often meet or exceed their asking prices.

However, affordability varies significantly across different areas of the city.

**Manhattan Rents Decline**

For the 13th consecutive month, Manhattan rents have fallen year over year. The median rent in this borough was $4,489 last month—down $91 from a year ago, indicating a 2.0% savings. This is also $362 less than its peak in August 2019 and still $171 lower than its pre-pandemic level.

Xu notes that this suggests "a relatively lower demand in this most expensive market." To afford renting an average place in Manhattan without spending more than 30% of income on housing and utilities requires a gross household income of $179,560 per year—or $14,963 per month—almost $105,000 more than the U.S. median household income of $74,580 as reported by the U.S. Census Bureau.

**Rent Increases in Outer Boroughs**

Despite declining prices in Manhattan, rents are rising in Queens, the Bronx, and Brooklyn due to stronger demand for more affordable housing options.

"In the face of record Manhattan rents and tight inventory," Lenz states that there is an increase in renters considering outer boroughs due to economic uncertainties making affordability and budgeting top priorities.

**Queens**

Queens experienced an 8.2% rise in rental prices to $3,380—the highest level recorded. This is $256 higher than last year and represents a significant increase of 40.1% since 2019. Renting a typical home here requires a gross household income of $135,200 per year—or $11,267 per month.

**The Bronx**

In the Bronx, July's median rent was $3,175—up by 7.7%, costing renters an additional $226 per month compared to last year. This marks the second-highest level since March 2019 with rents having surged by 60.9% over five years. Affording a typical rental unit here necessitates an annual household income of $127,000—or $10,583 per month.

**Brooklyn**

Brooklyn saw rent prices climb by 3.5% year over year to a median of $3,718—the highest ever recorded for this borough. Since 2019 before COVID-19 hit rentals have increased by 32.7%. Renting typically here requires an annual household income of about $148,720—or roughly $12,393 monthly.

**Demand for Smaller Units**

There is greater demand for smaller rental units such as studios and one-bedroom apartments compared to larger ones with three or more bedrooms whose median rent fell by 5% year over year to approximately $4,996 while smaller units rose slightly reaching around$3;322