Rent growth in New York City is expected to slow significantly in 2024, according to housing market forecasts from real estate firm StreetEasy. At the same time, the report predicts that demand for housing in the city will continue to outstrip available units, which will prevent rents from falling.
New York City’s inventory is expected to increase further in 2024, but it will still be below pre-pandemic levels. As a result, citywide rent growth will likely continue to increase, but at a slower rate than in 2023. The median asking price for rent in New York City has increased by 9.3% since the beginning of 2023. More and more homes are being put on the market as rentals. During the same period, StreetEasy’s rental properties increased by 8.8%. Rising rent prices and high mortgage rates will encourage more homeowners to rent their space in 2024. This means renters will have more properties to consider when deciding whether to renew their lease or find a new home.
Despite recent increases in supply across New York City, rental inventory in 2023 remains 16.2% lower than pre-pandemic levels in 2019. This situation is likely to remain the same in 2024, as the city needs to add at least 40,000 more units. Rent rates to reverse post-pandemic decline. Even before the pandemic, from 2017 to 2019, inventory only grew by about 21,000 units per year.
StreetEasy predicts that Manhattan is one of the boroughs likely to see asking rents fall as more inventory becomes available. With more inventory, landlords have more competition to attract potential tenants and lower prices.
Another prediction made by StreetEasy for 2024 is that the most popular product will be new condominiums with full amenities. Despite the high premium these homes command, StreetEasy predicts they will become more popular in 2024. Resale properties remain rare and mortgage rates are expected to remain above 6% next year, creating a backdrop for homebuyers to consider new construction at lower prices. Increase rate.
For some, moving to a new building may also be cheaper than renovating their home, primarily due to higher mortgage rates in addition to labor and material costs. While this may not be the case in 2024, the supply of new developments is likely to slow in the near future. This will intensify competition among buyers.
StreetEasy’s fourth and final prediction for 2024 was for asking prices to moderate as buyers and sellers begin to agree to higher mortgage rates. Selling a home in New York City has long been difficult because home prices are high compared to other areas. Mortgage rates will also rise in 2023, so there won’t be as many potential buyers who can afford to stay on the market.
To increase the chances of selling a property, sellers must prioritize competition over hope. According to StreetEasy, these sellers will have come to terms with the market and most will have asking prices below his $1 million. With so many willing buyers in New York City, the drop in prices is likely to be small.
StreetEasy predicts that mortgage rates will gradually fall below 7% in 2024, leading to an increase in the number of homebuyers. Lower interest rates would encourage more homeowners to put their homes on the market in a wider price range, but it would not be enough to tip the balance of power away from sellers and toward buyers.