May 17, 2025
There’s never a dull moment in New York City real estate, but 2025 has brought an especially complex twist: tariffs.
With the return of steep import taxes on steel and aluminum—key materials in residential development—developers are pumping the brakes, and renters are bracing for even higher prices.
The two boroughs feeling the brunt? Manhattan and the Bronx. These areas had the fastest growth in new multifamily housing permits over the last few years.
Now, that momentum may stall thanks to the rising cost of construction. It’s simple math—when building gets more expensive, developers either delay or cancel projects altogether.
Less supply, same (or higher) demand? You already know what that does to rent.
The data backs it up. In Q1 of 2025, NYC’s median asking rent rose to $3,397—up 5.6% year over year.
Manhattan rents now average $4,495, while Brooklyn isn’t far behind at $3,748.
Even the Bronx, which saw a slower quarter, is still up over 40% since pre-pandemic levels.
Smaller apartments—studios to two-beds—are especially hot. That median rose 7.2% from last year, while larger apartments only inched up by about 1.2%.
Clearly, more renters are downsizing or doubling up just to stay in the city.
And let’s talk affordability for a second. To comfortably rent in NYC while sticking to the 30% income rule, renters need to bring in $10,000 to $15,000 a month depending on the borough.
In Manhattan, you’d need to make nearly $180K a year. The issue? Most New Yorkers don’t. That mismatch is pushing people to overextend themselves financially or look outside the city altogether.
So what does all this mean if you’re a buyer or investor? Expect new development to slow, which could tighten the already competitive rental inventory even more.
If you’re holding rental property, you’re likely in a strong position.
But if you’re trying to break into the market—either as a renter or an investor—this climate demands strategy, flexibility, and a deep understanding of local trends.
As always, it’s a good time to connect with a knowledgeable real estate professional (hint, hint) to help you navigate these changes and spot the opportunities others might miss.
Disclaimer: This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.
