As it turns out, the rent really was too dang high

The median rent in Manhattan, America’s largest rental market, fell last month on an annual basis for the first time in over two years, per a new report from real-estate firms Douglas Elliman and Miller Samuel.

The report found Manhattan’s median monthly rent in November fell to $4,000, down from a record-high $4,400 in August and 2.3% lower compared to one year ago. It attributes this recent dip to several factors, including:

• The Fed’s recent series of rate hikes
• A growing supply of empty Manhattan apartments
• Local renters reaching their “affordability threshold” and becoming unable to pay higher prices

Big picture: The national median asking rent in November fell 2.1% from the prior year to reach $1,967, marking the biggest annual drop since February 2020, according to Redfin. However, US rents are still 22% higher compared to November 2019, and 4% shy of record-high levels reached this past August.

👀 Looking ahead… Economists say median rent prices are expected to decrease once the Fed starts cutting interest rates next year, since lower mortgage rates will incentivize would-be homeowners – who are currently priced out of buying and stuck in the rental market – to purchase a property.