Helped by a booming stock market and lower mortgage rates, the Manhattan apartment market posted a 7% increase in transactions compared to a year ago. Stocks continued to reach record highs throughout the quarter, while mortgage rates began falling in June and reached an 11-month low in mid-September.
While both the average and median sales prices for all apartments were down from the second quarter of 2025, they were higher than the prior year. A sharp drop in the average price for new development closings was a main factor in the quarterly decline in prices. Keep in mind that contracts to purchase new development units can be signed months or even years in advance of closing, so their prices are not always indicative of current market conditions.
Looking at just resale apartments, the average and median prices were virtually unchanged from the previous quarter, but up from 2024’s third quarter. The co-op market was strong, posting an increase in average price compared to both the second quarter of 2025, and one year ago.
After a solid third quarter, the Manhattan market is poised for a very active end of 2025. Mortgage rates are near an 11-month low, and with a slowing labor market and tame inflation should continue to trend lower. The Fed cut short-term rates at their September meeting and are expected to cut twice more this year. This should help economic growth remain steady despite a notable slowdown in hiring over the past few months. Wall Street is having another very strong year, with bonuses expected to be above last year’s record of $47.5 billion. These factors will keep demand strong at a time when inventory has fallen to a 5.7-month supply.
