July 2025 Manhattan & Brooklyn Market Update: The Latest on Rents, Sales & Mortgage Rates

Photo by Lerone Pieters on Unsplash

By Colin O'Leary

Summer is in full swing here in New York City. The sidewalks buzz with tourists, rooftop bars overflow at sunset, and many locals escape to the Hamptons, the Jersey Shore, or upstate retreats. But while New Yorkers head for the beaches and mountains, the real estate market back home remains anything but quiet — especially in Manhattan and Brooklyn, where rents are reaching new highs, the luxury sales market is booming, and recent policy changes are shaking up the rental business.

In Manhattan, the rental market continues its record-setting streak. In June 2025, the average rent climbed to $5,450, a 7% increase year-over-year and the seventh consecutive month of gains (NY Post, July 2025)¹. Median rent also rose 7.6% year-over-year to $4,625. These figures come just as the newly enacted FAIR Act begins to upend the way business has traditionally been done in the city’s rental market. By restricting broker fees paid by tenants and introducing stricter disclosure rules, the FAIR Act has shifted some costs back to landlords, who in turn have responded by pushing rents even higher. The vacancy rate fell to just 2.14%, down from 2.83% a year ago (NY Post)¹, underscoring strong demand. About 25% of new leases were signed above asking price, with an average premium of 11.2% (MarketWatch, July 2025)². And month-over-month, rents rose roughly 2.4% from May to June (MNS, June 2025)³, showing that the summer market remains intensely competitive.

On the sales side, Manhattan’s story is mixed. The median home value across New York County rose 2.9% year-over-year to about $1.22 million (Zillow, June 2025)⁴. Yet single-family homes saw median sale prices fall 10.5% to $5.5 million, condos dropped 4.6% to $1.6 million, and co-ops dipped 1.2% to around $840,000 (PropertyShark, Q2 2025)⁵. The bright spot is the luxury sector, where the median sale price surged 18% to $6.52 million, and an impressive 69% of these deals were completed all-cash (Redfin, July 2025)⁶. Overall transaction volume in Manhattan rose 16% year-over-year, powered mainly by these high-end buyers who are less sensitive to interest rates.

Across the East River, Brooklyn’s rental market is also climbing, although at a gentler pace than Manhattan. Median rent reached $3,733, up about 1% year-over-year (NY Post)¹, and average rent hit $4,210, marking a 2.8% increase year-over-year and the ninth straight month of growth (MarketWatch)². The FAIR Act’s effect is felt here too: landlords have responded by keeping prices high and negotiating more aggressively. Roughly 32% of leases were signed above asking price, with an average premium of 12.6% (Rocket Homes, June 2025)⁷. The average rent per square foot rose to a record $60.89, up 6.2% year-over-year (Redfin)⁶.

Brooklyn’s sales market remains steady and balanced. Depending on the source, median sale prices ranged from $850,000 to just over $1 million. PropertyShark reported a flat median of $850,000 in May (PropertyShark)⁵, while Realtor.com showed $875,000 in June, up 4.8% year-over-year, and Rocket Homes reported $1.019 million, up 4.4% year-over-year (Rocket Homes)⁷. Inventory fell about 5% month-over-month to roughly 4,500 homes, and homes are selling faster: average days on market dropped nearly 20% year-over-year to around 92 days. About 60% of homes sold at asking price, 9% above, and 41% below (Rocket Homes)⁷ — a sign of a still-competitive but healthier market compared to Manhattan’s extremes.

Adding to the market’s complexity this summer are mortgage rates, which remain elevated. As of July 2025, the average 30-year fixed mortgage rate is around 6.9%, while the 15-year fixed rate sits near 6.4% (Freddie Mac, July 2025)⁸. These higher rates are largely influenced by the Federal Reserve’s ongoing efforts to control inflation. The Fed recently held the federal funds rate in the range of 4.25% to 4.5%, signaling a continued pause after a series of hikes over the past two year (Federal Reserve, July 2025)⁹. Officials have emphasized that future decisions will depend on incoming economic data, maintaining a cautious approach. This has helped mortgage rates stabilize somewhat, though they remain well above the historic lows seen during the pandemic. These conditions continue to challenge some buyers, encouraging others to adjust their strategies, while cash buyers and investors remain less affected.

Overall, while many New Yorkers spend weekends at the shore or in the mountains, the city’s real estate market stays hot. Manhattan’s rental and luxury sales markets continue to lead, driven by record demand, policy shifts, and cash-rich buyers. Brooklyn shows steadier mid-market growth, with year-over-year price gains of about 4–5% and a faster pace of sales. Manhattan rents are up 7% year-over-year compared to 2.8% in Brooklyn, and luxury home prices in Manhattan have surged 18%.

As we head deeper into summer, inventory remains tight, mortgage rates stay high, and new policies like the FAIR Act are reshaping how deals get done — all signs that competition won’t let up soon. Whether you’re house hunting, renting, or just following the numbers, it’s clear: even in summer, the NYC market rarely takes a break.

For personalized guidance and expert support navigating the fast-moving NYC real estate market, contact The Big City Team at 646-300-2012. Whether you’re buying, renting, or selling in Manhattan or Brooklyn, we’re here to help you make smart, confident decisions every step of the way.

Sources:
¹ NY Post, “NYC rents continue to surge to record highs,” July 10, 2025
² MarketWatch, “NYC’s sky-high rent and bidding wars,” July 2025
³ MNS, Manhattan Rental Market Report, June 2025
⁴ Zillow, New York County Home Values, June 2025
⁵ PropertyShark, NYC Market Trends, Q2 2025
⁶ Redfin, NYC Housing Market Data, July 2025
⁷ Rocket Homes, Brooklyn Market Report, June 2025
⁸ Freddie Mac, Primary Mortgage Market Survey, July 2025
⁹ Federal Reserve, “Federal Open Market Committee Statement,” July 2025