Manhattan Rents Drop for First Time Since 2011

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Skyrocketing rental rates in Manhattan may have peaked, after rents dropped 3.1 percent in September from a year earlier.

The median rental rate for Manhattan stands at $3,095 a month, a 1.7 percent drop from August, according to the latest report from Miller Samuel prepared for the Douglas Elliman, the brokerage.

Concerns about rising mortgage interest rates prompted some renters to buy homes, the report theorizes. The shift left more apartments empty, as the vacancy rate rose to 2.66 percent, up from 1.85 percent in September 2012. The vacancy rate was the second highest in three years.

More renters were also moving when their lease expired and their landlord attempted to raise the rent.

"The sharp rise in new rentals reflected continued resistance to rising rents at time of lease renewal," according to Miller Samuel.

Renters were also helped by a spike in the availability of apartments for rent. The number of new rentals on the market was 35.9 percent higher than a year earlier, Miller Samuel reports.

But prices continued to rise at the top-end of the market. Rents for luxury apartments, the top 10 percent, were up 15.4 percent from a year earlier.