Manhattan Renters Downsize to Save on Soaring Costs

According to Bloomberg, Manhattan renters are increasingly opting for smaller apartments as they look to manage rising living costs in the city. 

By The Numbers

According to data from Miller Samuel Inc. and Douglas Elliman Real Estate, the average size of newly leased apartments dropped to 945 SF in July, down 9.5% compared to the same month last year. 

Notably, this marks the 11th consecutive month where the average Manhattan apartment size has shrunk, underscoring the growing trend toward downsizing as rent expenses rise.

Rents Holding Steady

Despite this shift to smaller spaces, the cost per square foot in Manhattan inched up slightly by 0.3%, reaching $85.03 in July. 

Meanwhile, the median rent for new leases held steady at $4.3K, the same as in June and just 2.3% below the record high set in July 2023.

Higher Leasing Activity

July also saw a significant increase in leasing activity, with 7.7K new leases signed—a record for the month and 54% more compared to the previous year. This surge in lease signings was supported by a 44% rise in available inventory, which reached 10.6K units. 

Jonathan Miller, president of Miller Samuel, suggested that the record number of new leases might indicate that renters are exploring other options after rejecting steep renewal increases at their current apartments.

Future Outlook

Looking ahead, August typically represents the peak of rental costs in New York, but Miller believes prices may have already reached their maximum. He noted that if mortgage rates continue to decline, more renters could be enticed to purchase homes, potentially easing pressure on rental prices. 

Similar trends were observed in Brooklyn and northwest Queens, where rents also fell from their July 2023 levels. Brooklyn’s median rent fell by 8.9% to $3.6K, while the median rent in parts of Queens, including Astoria and Long Island City, dropped by 5.2% to $3.45K.