https://www.axios.com/2022/07/14/manhattan-rents-cross-5000-threshold-for-first-time

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19 hours ago - Economy & Business

Manhattan rents cross $5,000 threshold for first time

[]Emily PeckEmily Peck

  * Emily Peck, author of Axios Markets

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Data: Miller Samuel; Chart: Axios VisualsData: Miller Samuel; Chart:
Axios Visuals
Data: Miller Samuel; Chart: Axios Visuals

The average price of a rental apartment in Manhattan surged above
$5,000 in June for the first time, hitting $5,058, according to a
report from brokerage firm Douglas Elliman out Thursday.

Why it matters: Manhattan is ultra-expensive -- typically an outlier --
but in this case it's on-trend. Rents are up across the country, as
soaring mortgage rates keep potential homebuyers stuck in the rental
market.

  * "You have a whole cohort being steered into rentals," says
    Jonathan Miller, the CEO of appraisal firm Miller Samuel who
    authored the Elliman report.
  * New Yorkers may still be avoiding the office, but they want to
    live in the city, he said. Demand is surging, and is expected to
    intensify this summer, he said.

The big picture: This points to a conundrum. The Fed is raising rates
to cool inflation. But rate hikes are driving higher rents, which are
fueling inflation.

Zoom out: Across the country, rents were up .8% in June from the
prior month -- the largest monthly jump since 1986, according to
yesterday's blazing hot CPI report. They've increased 5.6% since last
year.

  * If those numbers seem low -- after all there are headlines about
    40% rent increases -- it's because the CPI measure includes
    renewal rents, the price you pay when you renew your lease. Many
    popular rent measures only look at asking rents for new renters (
    more here).

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