- A Realtor report found the average monthly cost of owning a home in New York City is $6,952, about 184% above the $3,785 median asking rent in the third quarter.
- Median asking rent rose 4.5% in Q3 and sits 27.5% above pre-pandemic levels, with Manhattan up 8.3% and smaller units rising fastest.
- With mortgage rates above 7%, renters face a tougher path to buying, which should keep demand for multifamily housing strong and landlords’ pricing power intact.
Buying a home in New York City costs about 184% more per month than renting, according to a new Realtor report covered by GlobeSt.
Median asking rent hit $3,785 in the third quarter, up 4.5%, while the average monthly cost to own was $6,952.
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The Rate Squeeze
By our math, the gap is $3,167 a month, or about $38,000 a year.
Monthly ownership costs actually slipped 1%, but borrowing is far pricier. Realtor warned that with mortgage rates now above 7%, more renters could be locked out of buying.
Realtor projects the same home at roughly $11,008 monthly if rates sit at that level, which is $164 above last year’s figure.
Manhattan Leads
Manhattan’s 8.3% rent gain led the four major boroughs. Brooklyn rose 4.9%, Queens 3.9% and the Bronx 2.7%.
Smaller homes are rising faster. Units of up to two bedrooms climbed 7.1% to a median $3,662, while three-bedroom-plus units gained 2.9% to $5,089.
Rents across the city are now 27.5% above pre-pandemic levels.
Zoom Out
The gap is far wider here than nationally. In our brief on renting versus buying, Realtor.com found renting cheaper in all 50 largest metros, with a starter home costing $1,067 more per month, a 61.3% premium.
The measures differ, so the two numbers aren’t a direct comparison. Still, New York’s spread stands out.
Why It Matters
Rent growth squeezes households and slows saving for a down payment, so more people stay renters longer. That is a tailwind for the city’s multifamily market, as GlobeSt framed it.
The faster gains in smaller units favor buildings heavy on studios and one-bedrooms.
It lines up with Chandan Economics’ read in our report on NYC rent growth, which found rents up 4.3% in the year through September, ahead of the 2.9% national pace. Borough rankings differ across data sets, but both point up.
What’s Next
GlobeSt said the city’s rent freeze may frustrate owners of stabilized units. As we reported, it took effect Oct. 1 on about 1 million stabilized apartments after the Rent Guidelines Board’s 7-1 vote, and landlords are fighting it in court.
Market-rate landlords face a different picture: tight supply and a for-sale market that stays out of reach.
Mortgage rates are the number to watch. If they stay above 7%, the rent-versus-buy gap is likely to widen.
