Soaring costs, a tightening rental market, and a construction cliff: Greater Boston’s housing market is tougher than ever

view original post

Here are the key takeaways from the report:

By some measures, Boston has the most competitive rental market in the nation.

Greater Boston’s rental vacancy rate — a measure of demand that tracks what percentage of an area’s rental stock is unoccupied — was the lowest of any major metropolitan area, at just 3 percent in 2024, beating out the likes of New York and Washington, D.C. That has been the case for a few years now, and anyone who has tried to rent an apartment around here should not be surprised. (While vacancies have ticked up in some Boston neighborhoods due to fewer international students coming to the city this year, the city and regionwide vacancy rates are still low.)

It also makes sense, then, that rents here are among the nation’s highest, too.

While rents briefly dipped at the height of the pandemic, they’ve mostly only risen for decades. And while different companies that track rents have different measures of the median rent here (estimates range from $2,400 a month at the low end to closer to $3,500 at the high end), they mostly all agree that Boston is near the top of the charts.

The report card ranks Boston as the fifth-most expensive region in the country, citing data from Zillow’s Observed Rent Index. According to Zillow, Boston only trails San Diego, San Jose, San Francisco, and New York.

The production of new homes in this region has been relatively anemic for years, but Greater Boston did see a surge in new housing permits in 2021 and 2022 in the aftermath of the pandemic.

Those permits are paying off now, as most of the projects that were approved in that period have finished up over the last year or so, or will soon, according to new census data.

That’s a good thing, especially given the Healey administration’s goal of building 222,000 new units by 2035.

The bad news is, there’s a big drop-off coming soon. In the City of Boston, 2023 and 2024 were the two lowest years for new housing permits since 2012. And across the region, permits have fallen off, too. Through July of this year, municipalities in the region had only permitted 5,456 new homes, a 44 percent drop from the same period in 2021. In other words, when projects currently under construction are done, there is not much in the pipeline behind them.

The other bit of bad news is that while construction has spiked recently, home prices have kept rising. Now, as construction falls, that trend is likely to continue.

Home prices around here have been rising for decades, but the last few years have been particularly bad.

First, home prices soared in a pandemic-driven housing market frenzy. Then, when interest rates began to rise in 2021, the market effectively froze, driving prices higher still.

Prices have gone up everywhere and across the price spectrum. It’s in the communities where home prices were the lowest before the pandemic that prices have grown the most. In Brockton, for example, the median sale price of a single-family home has risen 72 percent since 2015. In Lawrence, it has more than doubled.

Prices have jumped on the high end, too. In 36 cities and towns, the median price of a single-family home now exceeds $1 million. In three — Brookline, Wellesley, and Weston — it tops $2 million.

As house and rent prices have risen, this should come as no surprise.

Over the last five years, the barriers to homeownership in this region have dramatically increased, even for the cheapest homes.

In 2021, a home in the lower third of the region’s housing market cost $399,554, and a household needed to earn about $98,000 a year to afford the monthly payments without being considered cost-burdened. In 2025, that same house costs $505,319, and a household must earn $162,224 to afford it, according to Boston Indicators, The Boston Foundation’s research arm.

That means that close to half of the people who could afford a home in that lowest tier of the market in 2021 no longer can.

The price constraints extend to renters, too.

Nearly half of all renters in Greater Boston are considered cost burdened, meaning they spend more than 30 percent of their monthly income on rent, and 26 percent are considered severely cost burdened. Those cost burdens are not spread equally: 56 percent of Black renter households in the region are cost-burdened, along with 52 percent of Latino households.

A confluence of factors helped drive a surge in homelessness in 2023 and 2024, with the number of homeless residents in the state reaching the highest point in recent memory in 2024.

And while homelessness has dipped slightly in 2025, far more residents are still homeless in this region than were before 2023.

The rise in homelessness between 2022 and 2024 was concentrated among Black and Latino populations, partially a reflection of new arrivals from the Caribbean and Latin America amid a broader surge in international migration that overwhelmed the state’s emergency shelter system. The homelessness rate for Black residents was 366 per 10,000 in January 2024, and 105 per 10,000 for Latino residents. For white residents, that rate was 21 per 10,000 residents.

The MBTA Communities Act — the state law mandating cities and towns with access to the T make room for more multifamily housing — was the state’s most pointed attempt at generating new housing construction across the region in decades.

It has been a mostly mixed bag.

The law has generated countless bruising fights in the 177 communities it covers, as housing advocates and town leaders have sought to paint visions of growth, while some residents have feared irreversible damage to their communities from new housing construction.

In some cases, opposition was so strong that town leaders specifically designed plans to comply with the law that would generate few, if any, new homes.

Housing is a contentious issue that can be difficult to sell to local voters, and the report recommended that town leaders form broad community coalitions to help support their plans. And it would help, too, the report said, if state officials rewarded communities that pass good plans with additional funding for the infrastructure some opponents worry additional housing will strain, like schools and roads.

---

Andrew Brinker can be reached at andrew.brinker@globe.com. Follow him @andrewnbrinker.