Declining Apartment Inventory in Manhattan

Manhattan continues to see a drop in its apartment inventory for the second consecutive year.

Recent data from the StreetEasy February Market Report indicates that this decline has now reached 24 months, the longest streak of decreased inventory recorded in the platform’s 20-year history.

Despite a building boom in the city, rising demand has fueled ongoing rent increases due to limited supply. The inventory crunch has persisted even as the number of new rental properties surged in 2025, marking the highest addition in a decade. Last year, New York City welcomed 18,618 new rental properties, but only 2,575—about 14%—were in Manhattan.

It appears that renters are now competing fiercely for older apartments.

The shortage has pushed the borough’s median asking rent to a peak of $4,700 in February, the highest level since last summer.

“While new constructions are increasing across the city, the growth isn’t uniform among the boroughs,” StreetEasy economist Kenny Lee noted.

Lee also mentioned that competition in Manhattan might peak in 2022, as companies have started calling employees back to the office, and rising interest rates are leading potential homebuyers to hold onto rental options.

“Demand has surged, but supply can’t keep up,” he remarked. “This supply shortage feels like it’s been decades in the making, as evidenced by this ongoing decline in inventory.”

Interestingly, while overall inventory is down, the availability of larger units—those with three or more bedrooms—is decreasing more significantly.

The post-pandemic urgency for renting hasn’t faded entirely. As per StreetEasy, properties listed in New York City in February received 52.1% more inquiries compared to February 2019.

Specifically, apartments with two or three bedrooms have seen substantial increases in interest, with inquiries for two-bedroom properties up by 90.7% and those for three-plus bedrooms increasing nearly 144%. Naturally, rents for these options have also risen.

This could create tricky situations for families or anyone looking to share living costs.

The core issue seems to lie in construction trends. Most new housing units across the city are either studios or one-bedroom apartments; developers appear to favor young professionals seeking convenient commutes. In Manhattan, 72.1% of new builds fall into this category.

In the Financial District, where conversions from office to residential spaces are rare, nearly 80% of new units are studios or one-bedrooms.

On the other hand, in family-oriented Brooklyn, just under half of the 11,167 new homes built last year consisted of two- or three-bedrooms, particularly around neighborhoods like Boerum Hill and Greenpoint.

As a result, landlords of older buildings in Manhattan have benefited noticeably. The median asking rent for prewar buildings rose 10.4% year-over-year to $3,975 in February, while rents for homes constructed since 2010 have remained stagnant.

Renters pushed out of Manhattan are beginning to create competition in Brooklyn and Queens.

Thanks to new developments, these two boroughs are now the largest rental market in the city. Areas such as Long Island City and Jamaica in Queens, as well as downtown Brooklyn, are especially notable. The Bronx has also started gaining traction, with one in five new rentals last year being new constructions, the highest prices in the city.

However, as costs climb, the ability of these boroughs to serve as alternatives for Manhattan residents is diminishing.

Median asking rents surged by 7.2% in Brooklyn to $3,750 and by 5% in Queens to $3,150 in February.

There is a hint of hope as mortgage rates moderately decrease from high levels, and the gradual conversion of office spaces into residential units may offer some relief for Manhattan residents and others. However, rental competition remains 50% higher than it was in 2019.

“Rent growth might decelerate, but we need to explore more properties,” Lee commented. “There’s still plenty of unmet demand from renters across the city.”