NYC apartment rental growth will cool rapidly

Rental growth in NYC reached 22% y/y in Q1 2022, one of the fastest rates in the country. But we expect growth to cool rapidly from here and underperform other cities. The past surge in rents largely reflects a reversal of large falls in 2020, which helped attract households back into the city. But with rents now 7.5% above pre-pandemic levels and the employment outlook relatively weak, we expect asking rents to increase by a cumulative 7% from 2023-26 compared to a gain of around 10% in other major cities. In view of the wider interest, we are also sending this US Housing Update to clients of our US Commercial Property Service.