Rents are up throughout New York City as mortgage prices keep would-be buyers stuck as renters.

Median rents in Manhattan hit $4,350 a month in January, up 4.8% from a year prior and slightly below the record $4,400 hit in August 2023, according to Douglas Elliman's monthly report.

“Rents are expanding. They're not at record levels, but they're getting closer,” said Jonathan Miller, CEO of Miller Samuel and author of the report. “Manhattan is very close to attaining new highs.”

With the average interest rate on a 30-year mortgage close to 7%, potential buyers in NYC’s housing market are still renting, with increased competition for housing pushing rents higher in Manhattan, Brooklyn and parts of Queens, the report found.

“When mortgage rates don't fall, when mortgage rates are flat or have the potential to rise, then that is reflected in higher rents,” Miller said. “That's what we're seeing.”

Median rents in Manhattan grew year-over-year for the fourth straight month and are 21% higher than five years ago. Rents are only likely to grow even higher in the coming months, Miller said, because new leases are outpacing supply growth.

“We're in this dystopian period where economic conditions are pretty vibrant, but the housing market is detached from that and has been suffering with high rents and low sales for the last three years,” Miller said.

While the median rent in Brooklyn was flat year-over-year at $3,500 a month, the price-per-square-foot of a Kings County apartment hit $57.90, up 5.9% from January 2024 and a new all-time high. More than 31% of all leases in the borough were signed after a bidding war.

“In Brooklyn, we have — even though median [rent] was flat — the highest market share bidding wars on record,” Miller said. “Almost a third of the market is renting for more than the landlord initially asked.”

Median rents also rose in the Queens neighborhoods covered by the report, which include Long Island City, Astoria, Woodside and Sunnyside, coming in at $3,400 a month, up 6.3% year-over-year.

The average lease signed was 2% above listing prices in Queens, indicating that landlords have pricing leverage throughout the city, Miller said. The number of leases signed indicates that the amount of new housing needed far outstrips the supply coming online, Miller said.

The macroeconomic conditions currently at play, with the Federal Reserve seeming unlikely to decrease interest rates amid uncertainty over the impact of tariffs, means that rents will likely continue growing.

“We saw an uptick in inflation, prices are up a little bit, fuel prices are up a little bit — we're seeing that,” he said. “It stands to reason that rates are going to be at, or higher, than where they are now, and so that is going to put more pressure on the rental market.”