Spring 2025: A Rental Market Defined by Pressure and Demand
New York City’s rental market continues to break records as we enter the spring season of 2025, with Manhattan and Brooklyn both reaching new rent highs. According to the latest Elliman Report, net effective median rent in Manhattan hit $4,471 in March, holding steady from February’s historic peak. Meanwhile, Brooklyn set a new per-square-foot record of $60.01, underscoring the persistent demand and rising competition for apartments across the boroughs.
At Duke Properties, we’re witnessing these dynamics firsthand. Demand for quality rental housing remains elevated, driven not just by seasonal trends, but by a larger shift in buyer behavior and economic sentiment.
Mortgage Rate Jitters Push Renters Off the Fence
One of the clearest drivers of this rental surge is the uncertainty surrounding homebuying. Rising mortgage rates—compounded by the economic ripple effects of President Trump’s latest tariffs—have prompted many would-be buyers to hit pause. With ownership temporarily off the table for some, renters are flooding the market, increasing competition and driving up prices.
As Jonathan Miller, author of the Elliman Report, aptly noted, “High rates push people into the rental market.” We’ve seen this before, particularly when the Federal Reserve raised interest rates in recent years. The difference now is that renters are arriving an masse in an already tight market.
Brooklyn Heats Up—And Renters Feel the Burn
While Manhattan’s luxury segment continues to command top-dollar—median luxury rents are now at $10,500—Brooklyn is seeing intense activity in the mid-tier market. Median rent in the borough hit $3,700, a 5.9% increase from March 2024, and more tellingly, over one-third of new leases involved a bidding war. This is the second-highest rate on record.
For many renters, Brooklyn once symbolized value. But as lease activity rises and inventory tightens, affordability is increasingly elusive—even in neighborhoods that previously offered more breathing room.
More Listings, But Still Not Enough Relief
There is some good news for renters: inventory is rising. Manhattan saw a 23.1% year-over-year increase in listings, Brooklyn rose 26.1%, and Queens jumped 66.1%. These numbers suggest that more landlords are returning units to the market, potentially easing some of the pressure in the months ahead.
Yet even with more choice, price relief remains minimal, especially for non-doorman units—a segment often sought by budget-conscious renters. Median rent for these apartments rose nearly 9% last month, compared to a 5% increase in the luxury doorman market.
At Duke Properties, we advise both landlords and renters to watch these trends closely. Inventory expansion can help—but only if paired with realistic pricing and responsive leasing strategies.
Spotlight on Queens: Demand for Two-Bedrooms Surges
The Queens market is also seeing its share of activity. In the northwest region covered by the report, median rent climbed to $3,450, a 7.8% annual increase. What stands out is that lease signings for two-bedroom units surged nearly 30%, showing that families and roommates are prioritizing space and value as pricing pressures mount elsewhere.
This mirrors a broader trend we’re seeing across NYC: renters are willing to explore outer boroughs and new neighborhoods, but they’re still facing rising rents nearly everywhere they turn.
Final Thoughts: A Market of Extremes and Adjustments
As New York City’s rental market continues to set records, we’re entering a phase where demand, pricing, and affordability must realign. At Duke Properties, we believe the second half of 2025 will test landlords’ ability to balance pricing power with market realities—and tenants’ willingness to make trade-offs in location, size, and amenities.
For property owners, this is the time to strategize around tenant retention and realistic renewal rates. For renters, it’s a moment to act decisively—but also carefully, as competition intensifies.
The city may be expensive, but it remains resilient—and that’s as true for renters as it is for the real estate professionals navigating these changes alongside them.
— Albert Dweck
Founder & CEO, Duke Properties