Navigating New York City’s real estate market has never been easy—but this summer, the decision between renting and buying could be more strategic than ever. With a tightening rental market and new incentives for buyers, now might be the ideal moment to rethink the long-running renting vs. buying debate.
The Summer Rental Frenzy: A Tough Season for Renters
Summer is traditionally the hottest rental season in NYC—and this year is no exception. The competition for apartments is intense, and data from May 2025 paints a clear picture:
Summer is traditionally the hottest rental season in NYC—and this year is no exception. The competition for apartments is intense, and data from May 2025 paints a clear picture:
- Only 6,254 active listings across Manhattan, a 19% drop year-over-year.
- Manhattan apartments rented on average in just 39 days, the fastest May in over seven years.
- Vacancy rate? A mere 1.65%, the lowest recorded for the month of May, in six years.
This limited rental inventory has created a frenzied market for renters, with bidding wars and soaring prices becoming increasingly common. Renting simply isn’t what it used to be—especially when you’re paying top dollar without building equity or realizing any long-term financial benefit.
Buying: A More Appealing Option Than You Might Expect
As the rental market becomes increasingly competitive, the sales side is offering some unexpected value. Certain market segments have remained stable, while others are seeing lower demand—prompting sellers to reduce asking prices, in some cases below sales levels from the past couple of years. In many cases, properties that need renovations are selling at notable discounts, providing buyers with a solid opportunity in today’s market.
As the rental market becomes increasingly competitive, the sales side is offering some unexpected value. Certain market segments have remained stable, while others are seeing lower demand—prompting sellers to reduce asking prices, in some cases below sales levels from the past couple of years. In many cases, properties that need renovations are selling at notable discounts, providing buyers with a solid opportunity in today’s market.
Here’s why buying is looking especially attractive in today’s market:
1. High Rents, Flat Sale Prices
Rents are soaring while sales prices are not. That disparity makes the cost of ownership—particularly over the long term—more appealing.
2. Tax Advantages
Owners benefit from a range of tax deductions (depending on eligibility) that renters simply don’t have access to:
• Mortgage interest deduction - You can deduct home mortgage interest on the first $750,000 ($375,000 if married filing separately) of indebtedness.
• Property tax deduction - currently capped at $10,000 under SALT (State and Local Tax) rules, but a new bill just passed in Congress that temporarily raises the SALT deduction limit to $40,000 starting in 2025. That benefit starts to phase out, or decrease, for consumers who earn more than $500,000 of income. Both figures will increase by 1% yearly through 2029 and the higher limit will revert to $10,000 in 2030.
• The STAR tax credit for eligible homeowners, along with other first-time buyer incentives, can further reduce annual housing costs
Even with the higher upfront costs of taking on a mortgage, these tax benefits can help offset a portion of that expense.
3. Rate Strategy: Buy Now, Refinance Later
Mortgage rates remain steady, and some analysts anticipate a downward pressure on Fed rates later this year, though predictions vary depending on inflation trends and broader economic conditions. While mortgage rates aren’t directly tied to the Federal Reserve’s benchmark rate—they more closely follow the 10-year Treasury yield—the two often move in tandem, as the Fed’s rate decisions frequently influence Treasury yields.
If you’re financially able to take on a mortgage at current rates, buying now and refinancing later when rates decline may be a smart move. While waiting may lead to lower rates, it could also mean higher prices and increased competition, potentially canceling out any savings.
4. Value in Renovation and Co-ops
There are real opportunities right now for buyers open to renovation. Fixer-uppers are lingering on the market and tend to be more negotiable, particularly when a property has been listed for a while. Additionally, if you qualify for a co-op, buying in one can lead to substantial savings compared to condo ownership.
5. Building Equity and Long-Term Stability
Buying isn’t just about short-term numbers—it’s an investment in equity, stability, and the freedom to make a space your own. For many, homeownership remains a cornerstone of long-term financial planning—and in today’s unpredictable rental market, it offers a much-needed sense of security.
So, to Rent or Buy?
The answer ultimately depends on your personal goals, lifestyle, financial situation, and need for flexibility. But with the rental market as competitive as ever—and the sales market offering more opportunities than it has in recent years, buying is becoming an increasingly compelling option. There are plenty of resources to help you determine what’s in your best interest, including speaking with a financial advisor, using online calculators, or consulting an experienced real estate professional.
