Rents are soaring throughout NYC as supply is dwindling.

A few days ago, the second quarter real estate report for U.S. rentals was released, providing plenty of information on the national housing market. The verdict: rents have increased to an all-time high, particularly in New York City. Additionally, demand is at an all time-high. But the most staggering statistic at all is that the U.S. vacancy rate has sharply decreased to a level that hasn’t been seen since 2001. The report has several implications for the Manhattan market, beginning with the fact that in New York City, average rents are now at $2,935 per month, 1.7% more than last quarter.

The three most important words in real estate, as even non-real estate types know, are location, location and location. This would be why we worked so hard on the "Apartments Near" modality at Luxury Rentals Manhattan. But if we could add a fourth word to real estate's holy (and wholly redundant) trinity, it would be "scarcity." You don't need to be Paul Krugman to know how this works -- the fewer available rental apartments there are, the more prices tend to climb. (Scarcity has always been a big part of the appeal of no-fee rental apartment listings -- in addition to the fact that no fee rentals are a great value, naturally -- but we're already seeing the effects of an improving NYC real estate market in the shrinking number of no-fee rental apartments) The fact that Manhattan's rental vacancy rate continues to fall further and further below one percent suggests that, as previous studies have indicated, the recovering NYC rental market is going to lead to higher prices on Manhattan rental apartments. With the usual caveat that there are still plenty of good deals on Manhattan rental apartments to be found -- and with the reminder that you can browse Manhattan rental listings here to find them -- let's take a look at what Citi Habitats' new Manhattan rental market report means for NYC rental apartment hunters, and everyone else.