The rent in Manhattan increased by 10% compared to last year

Rents in Manhattan reached another peak in May and are not expected to weaken soon, according to a monthly report published Thursday from Douglas Elliman, a brokerage firm, and Miller Samuel, an appraisal and consulting firm.

While rents are cooling in some parts of the United States, the cost of renting an apartment in Manhattan hit a record high in May for the third month in a row.

The median cost of renting an apartment in Manhattan was $4,395 in May. That's up 10% from last year and up 3.6% from April, when rents peaked at $4,241. The average rent for all apartments in May was $5,379.

Over the past 18 months, rents have been near or breaking records in Manhattan, said Jonathan Miller, president and CEO of Miller Samuel.

"From the beginning of 2022 when we were just starting to think about whether the Federal Reserve was going to do something with interest rates and the buying market was slowing down, there was upward pressure on rents in Manhattan," Miller said.

A one-bedroom apartment had an average rent of $4,275 in May, up 7% from last year, while a two-bedroom apartment had an average rent of $5,400, up 8% from last year. A studio apartment rents for an average price of $3,200, an increase of 7.6% from last year.

Not only are average rental prices rising, but the share of new leases with concessions - or incentives offered by landlords - is falling. Only 11.7% of the new leases came with concessions, compared to 12.9% last month and 15.3% a year ago.

Inventory is up 21% from last year, but is still below average inventory levels over the past decade.

"Rents are going up, but inventory is still lower than the long-term average," Miller said. The benefit of increasing inventory, he said, is that once the seasonal peak passes and demand begins to cool, that extra inventory may help prevent prices from rising further in the fall.

But are the rents going down? Unlikely, Miller said.

"The only thing that I can see that will take the pressure off the rent and produce a significant decrease is a recession," Miller said. "They predicted a recession in the last two years. But until a negative economic event occurs, it is difficult to imagine a significant decrease in rents."

Rents were also at or near record highs in the boroughs of Brooklyn and Queens last month, according to the report.

Brooklyn reached a record average rent for the second month in a row, with the average price for all apartments at $3,550, up 1.4% from April and up 9.2% from last year.

In Queens, May's average rent of $3,402 was the second highest on record, up 15.3% from last year.

For those looking for an apartment in New York, expect higher rents going forward.

Typically, rental activity increases from the spring to a peak in late summer, and prices are expected to reach additional highs before September, Miller said.

"May is the middle of the peak rental season," he said. "With heavy new leasing activity, it seems reasonable to expect another few months of records."