Research
NYC Economic Trends & Insights: Q4 2025
February 5, 2026
Highlights
New York City’s private sector saw its strongest employment gains of 2025 in Q4, but critical industries like Financial Services and Professional & Business Services continue to lag.
Transit ridership reached a new post-pandemic peak, helping New York City make modest gains in tourism despite a national downturn in visitation.
New York City’s commercial and retail real estate markets have improved with vacancy rates declining this year.
New York City’s housing market continues to tighten, with availabilities slipping and rents increasing.
New York City companies posted their second-best year of venture capital fundraising ever, with AI companies having their strongest year on record.
Employment Update
Five sectors all posted employment gains compared to Q4 2024, faring better than all previous quarters in 2025.
Banking, a subsector of Financial Services, and Administrative Services, a subsector of Professional & Business Services, fared better than their parent sectors, both of which experienced lower employment totals compared to Q4 2024.
Health care continues to lead the city’s employment gains, now accounting for over 25% of the city’s total private sector employment, up from 20% at the start of the decade.
Impending federal cuts to Medicaid may lead to a reduction in the city’s hiring and employment rates in the health care sector.
All other sectors, except utilities, declined in share of New York City’s private sector between 2020 and 2025. Retail fared the worst, declining from 8.5% in 2020 to 6.8% in 2025.
Tourism Update
A modest increase in tourists and record post-pandemic transit ridership show New York’s resiliency in the face of national trends and translated to record consumer spending.
Despite initial projections of a reduction in tourism in 2025 compared to 2024, total visitors to New York City grew marginally by 0.3%, reaching 64.7 million visitors.
Domestic tourists increased by 2% while international tourists declined by 4.9%. Fueled by the upcoming World Cup matches taking place in the region, international tourism is expected to bounce back to pre-2025 levels this year.
New York City’s domestic and international traveler trends outpaced national ones. Domestic tourism increased 1.9% nationwide while international tourism declined by 6.3%.
The subway, Metro-North, and Long Island Rail Road all posted monthly ridership improvements compared to Q4 2024, with an average year-over-year increase of 4.8%.
In December 2025, subway ridership improved to 79% of 2019 levels (+5 percentage points (pp) from December 2024), Metro-North improved to 84% of 2019 levels (+5pp), and Long Island Rail Road improved to 93% of 2019 levels (+8pp).
Average office visits improved year-over-year by 4% in Q4 2025 compared to Q4 2024. The increase in local ridership is not exclusively aligned with the increase in office visits, meaning more riders are traveling into and around the city for non-work-related endeavors.
More tourists and increased ridership translated into higher consumer spending in New York City. As of October 2025 (the latest available data), sales tax revenues were up 6% year-to-date compared to October 2024, and real revenues had outpaced expected revenues by 2%.
Broadway ticket sales and attendance for the 2025-2026 season, beginning in June 2025, posted their highest volumes ever, indicative of the increased tourism and consumer spending fueling New York’s economic growth.
Commercial Real Estate Update
New York City’s commercial and retail vacancy rates have both declined, signaling confidence in the city’s economic future.
Overall commercial vacancy rates continued to decline through the end of 2025, the business sector’s positive outlook on New York City’s employment and post-pandemic return to office trends.
Commercial building rents increased slightly (46¢) compared to Q4 2024, continuing a reversal of the downward slide of commercial building rents in 2024.
Year-to-date absorption increased 221% in 2025 compared to 2024, with over 7.5 million more square feet leased than vacated in 2025.
New York City’s commercial construction pipeline was the second largest nationally at the end of 2025, with 2.34 million square feet under construction.
Moody’s enacted the largest new lease transaction of Q4 2025, leasing over 457,000 square feet of office space at 200 Liberty Street, which is owned by Brookfield Properties. (Moody’s and Brookfield Properties are members of the Partnership for New York City.)
RXR and Rudin completed two of the largest sales transactions of Q4 2025, selling over 775,000 and 340,000 square feet of commercial office space respectively. (RXR and Rudin are members of the Partnership for New York City.)
New York City led the country in total office sales value in 2025, with nearly $7.8 billion worth of office space sold during the year, 39% higher than second place Bay Area.
Residential Real Estate Update
New Yorkers are paying more for housing than ever before, and the construction pipeline isn’t catching up.
On average, rental availability across New York City declined in Q4 2025 compared to 2024, while rents soared by 7.7%.
Home prices continue to climb, reaching a median sale value of almost $1 million in Q4 2025. While the number of recorded sales increased, New York state (51.3%) and New York City (32%) maintain the lowest homeownership rates for a state and major city in the United States.
New York City is currently experiencing a housing emergency, as its rental vacancy rate stood at an estimated 3.4% in January 2026, below the 5% housing emergency threshold. To address this shortage, in 2024 New York City officials set a 500,000-unit construction goal by 2034, but only 66,000 (13%) of which were completed by the end of 2025.
As of October 2025 — the latest available data due to reporting lags — permitting of new residential construction was down 37% citywide compared to the same period in 2024.
Taking into account the permitting and completion rates of new constructions, only about 80% of New York City’s 500,000-unit goal would be completed by 2034.
Venture Capital Update
New York City companies raised $29.6 billion in venture capital (VC) in 2025, the second-highest fundraising year in history.
Prediction market services Polymarket and Kalshi raised over $3.7 billion in VC investments in 2025, bolstering New York City as the top city for financial trading.
New York City has a more diverse portfolio than competitor cities. The city’s top five deals by monetary size account for 20.5% of all VC funding raised in 2025, while Silicon Valley’s top five deals account for over 46% of the region’s VC investments.
New York City-based AI companies raised over $16.7 billion in VC funds in 2025. This is an 80% increase over 2024’s year-end total and the largest fundraising year for AI on record.
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