From the Field: New York | 2025 Rental Housing Trends Center on Consumer Stress, Retention, and Expense Control

With another road trip now in the books, here are three key topics that attracted quite a bit of attention in the discussions I had recently with an assortment of rental housing sector investors and media outlets based in New York.

Increased Consumer Stress Could Be Brewing.

The word “uncertainty” continues to come up in every conversation about what’s happening in the economy, with rental housing owners and operators watching for shifts in consumer behavior and signals that rent collection efforts could become more challenging in the not-too-distant future. Soaring credit card debt and a rise in credit card debt delinquencies are concerning, as is a bump in those falling behind on auto loan payments. Add the return of student loan payment obligations to that story of household finances, and the potential stumble that could come with an acceleration of price inflation becomes even more pronounced.

Surging Resident Retention Leads to Playbook Tweaks.

Limited unit turnover when initial leases reach their conclusion has been a big positive influence on rental housing revenues this year. While that’s creating some headwinds for new deliveries moving through initial lease-up, stabilized properties are benefiting from the pricing power seen for renewal leases as well as the reduction of days of vacancy incurred when units turn and the pullback in unit make-ready costs. Some firms that specialize in middle-market product that gets upgraded between residents now are adjusting their gameplans to reflect that so many fewer units are going vacant. As budgeting for 2026 begins (yes, already!), there’s now the question of whether today’s extremely high resident retention rates are sustainable or are a point-in-time temporary performance metric.

Operational Expense Escalation Gets Reined In.

After several years when rental housing operational expenses climbed rapidly, many owners and managers are seeing overall cash outlays stabilize at this point. Dropping property insurance bills have come to the rescue for the moment, according to quite a few firms. Companies are now digging through their expense stats category by category, measuring what’s up, what’s flat and – in a few cases – what’s down. Look for expense analysis to attract lots of attention as next year’s budgets get established during 2025’s second half.

Thanks to those who took the time to chat with the LeaseLock team during our New York visit. There’s nothing like hearing about market trends, concerns and hot-button topics directly from industry experts making investment decisions and living in day-to-day operations world.