Why Two-Thirds of New Yorkers Rent, Not Buy (2024)

FAQs

Why do so many people rent in New York? ›

Thus, for some New Yorkers, renting is about affordability — an option that seems financially more wise than buying. For others, renting is a lifestyle choice, and not simply a way to find shelter until they can afford to buy.

As Many as 595,000 Households Remain Behind on Rent.

However, ANHD's analysis of the most recent Census Household Pulse Survey Data showed that as of January 10, 2022, 17.2% of respondents in New York were behind on rent payments, translating to 595,000 of the State's 3,461,000 renter households.

One of the major benefits of renting versus owning is that renters don't have to pay property taxes. Real estate taxes can be a hefty burden for homeowners and vary by county. In some areas, the costs associated with property taxes can amount to thousands of dollars each year.

The share of New York City households that were rent burdened stayed fairly constant - going from 54.5 percent in 2011, to 54.1 percent in 2021.

If you can afford it and plan to live in NYC for a while, you should consider buying it even if you can't afford it for now. Build up your credit and save up money so you can afford the upfront costs. Of course, there's no shame in renting long-term. Around 67 percent of New Yorkers rent.

Fast Facts about NYC Housing

As of 2017, New York City had 3,469,240 total housing units. Of these units, 1,038,200 are owner-occupied and 2,183,064 are renter-occupied. Over half of all renters in New York City spend 30% or more of their income on rent and one third of renters spend 50% of their income on rent.

Affordable apartments are harder to find than ever: According to the city's most recent housing survey, less than 1% of apartments priced below $1,500 were vacant and available for rent—an “extreme vacancy shortage.” The report found that from 2017 and 2021, the city lost about 96,000 units renting for less than $1,500 ...

A longstanding shortage.

While the city always seems to be building and expanding, experts say it is not fast enough to keep up with demand. Zoning restrictions, the cost of building and the ability by politicians to come up with a solution are among the barriers to increasing the supply of housing.

Americans across the country are spending more than they can afford on rent, according to a report from Realtor.com. The February Rental Report found that despite a slight decrease in rent prices, affordability continued to get worse in 26 major metros.

A major disadvantage of renting to own is that renters lose their down payment and other non-refundable charges if they decide not to purchase the home. Some sellers may even take advantage of renters by making it difficult or unappealing to purchase the home — with the goal of keeping the down payment.

Is it really better to buy than rent? ›

Renting provides much more flexibility. However, if you have returned to the office, either full-time or partially, and assume you'll remain in your current job for a few years, then buying might be wiser. A common rule of thumb is if you plan to stay in the home for five to seven years, then buying is a good option.

Buying a house gives you ownership, privacy and home equity, but the expensive repairs, taxes, interest and insurance can really get you. Renting a home or apartment is lower maintenance and gives you more flexibility to move. But you may have to deal with rent increases, loud neighbors or a grumpy landlord.

Often people rent when they cannot afford a down payment for home, have poor credit, excessive debt, or are in the process of building their credit. When a person rents he/she is not responsible for repairs to the home or yard upkeep.

The New York City housing shortage, decades in the making, is a major factor in the city's lack of affordability, as home building has lagged behind population and job growth. In recent months, a growing number of officials have proposed ideas to make it easier to build more housing.

Affordable housing providers' crisis: 1 in 3 tenants owe rent. In a survey covering nearly 50,000 affordable housing units, an advocacy group found nearly one-third owe two months or more in rent, an average of $9,565 each. The most indebted 10 percent of renters are an average of $22,000 behind.

Renting offers you the flexibility you need if, say, you switch jobs or are always on the move. When you buy a home, you usually expect to live there for a long time, but renting is a better choice if you have to keep moving once every couple of years, or if you're not quite sure where you want to settle down.

New York City real estate has been a good investment over the long term. For example, the average price per square foot of a Manhattan condo rose 5% compounded annually over the last 15 years. Considering, one could leverage a purchase with a mortgage, the yield would multiply.

Buying an Apartment

When you own a property, it gives you a sense of security and stability. You can do whatever you want with the apartment; there are no lease agreements, no hassle of rents, and no disturbance of a roommate.

Average rent in the outer boroughs of Staten Island, the Bronx, and Queens will help you save significantly if you're willing to sacrifice living in the heart of the city. Living in the outer boroughs also means you won't have to worry as much the way you would if you were to live on a budget in New York City.

Which City Is More Affordable: Los Angeles or New York City? Both NYC and LA are among the most expensive cities in both the U.S. and the world. However, the average cost of living in LA is also 24-27% lower than that of NYC.

How many apartments in NYC are empty? ›

The city's most recent housing survey found that just 4.5% of apartments were empty and available to rent, with the vacancy rate lower than 1% for units priced below $1,500 — figures that represent a “housing emergency” under state law.

Rent control measures were established in New York City during the 1920s as eviction cases rose and new construction slowed during World War I. Similar measures were put in place during World War II to fight inflation and prevent housing shortages.

While there's no consensus on what rents will do exactly in 2023 — go up a little, go down a little, or stay flat, according to three forecasts — what's clear is they are expected to return to more normal growth patterns, instead of the unsustainable, record rates seen in 2021 and 2022.

NYC home prices will fall, but don't expect a collapse

All in all, the Fed will likely keep interest rates elevated through much of next year. This means 30-year mortgage rates will remain elevated in 2023.

The city's population is growing rapidly, and demand for housing is increasing, leading to a housing shortage that has driven up prices. The high cost of living in New York City means that many people are competing for a limited supply of affordable housing, leading to steep competition and high rent prices.

Net effective median rents rose from a year earlier for the 18th straight month in Manhattan as landlords grew less willing to grant concessions and renters desperate to find a home amid dwindling inventory engaged in bidding wars, according to Miller Samuel Inc. and brokerage Douglas Elliman Real Estate.

The lowest rental rates are usually found between October and April, particularly right after the December holiday season. Fewer people are interested in moving—the weather's bad, schools are in session, etc. So individuals renting between the months of December and March typically find the best rental bargains.

California had the most renting households with 5.73 million, or 13.6 percent of the nation's 42 million rental homes. Tenants in California make up 44 percent of households in the state, the third-largest share of renters behind. D.C., at 58 percent, and New York at 45 percent.

Homeowner vs.

In the under-35 age group, 65% of American households are rented. Meanwhile, in the 65+ age group (senior citizens), 79.3% own a home. The median age of homebuyers is 47 years old, while the median age of renters is 38 years old. A whopping 64% of millennials who own homes regret their purchase of a home.

Key findings

Put another way, 13.17% of the nation's adult renters live in a household that charges them rent and are behind on payment. Nationwide, 3,560,345 adults — 5.81% of adult renters — live in a household that doesn't pay rent.

What are 3 advantages of rent-to-own? ›

#1: Vacancy Rates

The biggest and most common risk that real estate investors need to consider is high vacancy rates! Tenants will be the primary income source for all your rental properties. So, if you want them to make money, you need to keep your property occupied!

Key points. Renting a property is often referred to as throwing away money. That's because, unlike with a mortgage loan, renting doesn't help you build equity. Renting isn't necessarily the wrong move for everyone though.

If you're only going to live in a place for only a year or two, renting makes more sense. However, if you're going to stay there for three years or more, then buying would be a good idea and it becomes a better idea the longer you stay.

The Importance of Homeownership

Real estate is considered by many to be a sound investment that offers unique wealth-building opportunities. Buying a home expands options for the future, whether you plan to sell and make a profit or leverage the equity in your home to pay for other major expenses.

As adults age into their 50s and 60s, many of them are ready to downsize. That often means purchasing a townhouse to trim maintenance or a smaller one-story home to keep stair climbing to a minimum.

Because rent payments tend to be cheaper than mortgage payments, renting can be a good option for those who would struggle to keep up with a mortgage at today's rates. You don't have enough cash for a down payment.

A common formula that provides a rough calculation of how much you should charge in rent is the 1 percent rule, which holds that you 1% of your underlying mortgage on the property is what you should charge for rent.

The Financial Benefits of Homeownership

Another key way homeownership helps you build wealth is by providing you with equity in your home—the portion of your home that you actually own outright. As you make mortgage payments and your loan balance decreases, your equity will increase.

Do most people own or rent in NYC? ›

Fast Facts about NYC Housing

As of 2017, New York City had 3,469,240 total housing units. Of these units, 1,038,200 are owner-occupied and 2,183,064 are renter-occupied. Over half of all renters in New York City spend 30% or more of their income on rent and one third of renters spend 50% of their income on rent.

In the second quarter of 2022, homeownership rates were 53.6 percent in New York and 65.8 percent nationally. In 2021, New York's annual homeownership rate was the lowest in the nation at 55.4 percent.

Columbia University is the largest owner in New York City by the number of locations and manages over 5000 apartments across 150 residential buildings. Renters of the buildings, mostly students, are pleased with the management's affordability and attention.

Net effective median rents rose from a year earlier for the 18th straight month in Manhattan as landlords grew less willing to grant concessions and renters desperate to find a home amid dwindling inventory engaged in bidding wars, according to Miller Samuel Inc. and brokerage Douglas Elliman Real Estate.

Many of the newcomers choose to move to NYC because it offers plenty of new job and career opportunities. If you want to make a step forward in your career and move from another country or state to NY, you've come to the right place!

Realtors claim unprecedented demand, sparked by an influx to the Big Apple as lockdown restrictions were lifted, is to blame for the hikes. The median monthly rent in Manhattan was nearly $4,100 per month in January, compared to a low of around $2,900 during the pandemic and about $3,500 just before.

While there's no consensus on what rents will do exactly in 2023 — go up a little, go down a little, or stay flat, according to three forecasts — what's clear is they are expected to return to more normal growth patterns, instead of the unsustainable, record rates seen in 2021 and 2022.

While the city always seems to be building and expanding, experts say it is not fast enough to keep up with demand. Zoning restrictions, the cost of building and the ability by politicians to come up with a solution are among the barriers to increasing the supply of housing. Rising costs.

In New York City, Rent Control tenants are generally in buildings built before February 1, 1947, where the tenant is in continuous occupancy prior to July 1, 1971. Tenants who took occupancy after June 30, 1971, in buildings of six or more units built before January 1, 1974, are generally Rent Stabilized.

New York's current rent control program began in 1943. It is the longest-running in the United States.

Does New York rent Now have more? ›

The rent marks an 8.1% jump from April 2022, according to a joint market report conducted by real estate brokerage Douglas Elliman and appraiser Miller Samuel. The spike in average rent for April was even worse in Brooklyn and Queens, surging 14.8% and 12.8%, respectively, compared with last year.

New York City offers so much variety that you could live here your entire life and not eat in every restaurant, see every Broadway show, hit every jazz club, or live in every neighborhood. You never run out of new things to do, dishes to eat, places to visit, or people to meet.

The Top 10 Outbound States of 2022

The top motivations for outbound moves from New York include retirement, lifestyle change and cost of living.

People already struggling to afford the staggering cost of living in New York City were hit with a new, ominous figure on Thursday: A panel that regulates rent-stabilized apartments discussed rent increases of 15.75 percent on two-year leases, the highest such figure in almost two decades.

Why is rent so high in the US right now? Over the past two years, the U.S. median rent rose by 18%. That was mostly because a competitive housing market and higher mortgage rates shut many people out of home buying. A strong jobs market and shortage of inventory also contributed to rising rent.