Boston rents for first time in six years, but apartment prices are rising in new ways
Posted On June 18, 2021
The first full month of the year has been an unmitigated success for Boston, where apartment prices in the city’s hottest borough soared more than 30% over the year to a record $1,600 per square foot.
In the six months through June 26, rents in the area’s most expensive neighborhood climbed to a new record of $1.7 million, according to data from real estate data company Realtor.com.
In Boston’s priciest neighborhood, the city is still seeing an uptick in rental prices, but rents are trending lower, according the real estate website Zillow.
The increase comes amid a national trend of renters being priced out of the city, especially after the U.S. Federal Reserve began pumping money into the housing market with an unprecedented $700 billion asset purchase program.
That stimulus program has helped spur a massive increase in the number of renters in the country.
The United States has seen more than 8 million new renters since the beginning of 2016, according Realtors.
But while some cities in the U, such as Chicago and New York, are seeing a massive surge in new renters, Boston is seeing a slower increase.
Zillow found that in Boston, the median price of an apartment rose by only 1.1% during the first six months of 2017, compared with a 3.9% increase during the same period last year.
The median rent rose only 1% in the same six months last year, compared to a 4.1 percent increase the same time last year during the recovery from the recession.
Boston also saw a sharp increase in renters who were looking to buy in the first half of 2017.
According to Zillows data, rents were up 8.6% in Boston in the fourth quarter of 2017 compared to the same quarter last year as more than 1.4 million new renter households were moving into the city.
It’s not just renters who are experiencing a rent boost in Boston.
As rents continue to climb, other factors are contributing to the rental growth.
Boston is experiencing an influx of young families, many of whom are looking to stay in the region and buy a home.
With the median age of a renter in the Boston area now at 29, many are now looking to purchase a home, which can cost anywhere from $150,000 to $200,000.
But as more people move into Boston, more of them are renting, too.
“The biggest reason why the housing recovery is happening in Boston is young families are moving here and they’re buying a home,” said Matt McBride, a senior research analyst at Zillower.
“That’s why the rent market is booming, and that’s why we see a housing boom.”
Boston has a growing population, and in the next six months, more people will move into the Boston metro area than will stay in Massachusetts.
The number of people living in Boston has grown from 3.8 million in 2015 to 4.3 million in 2017, according Zillowed.
In June, the region’s population grew by about 7% to 6.2 million, with about 2.6 million residents moving into and out of Massachusetts.
Rents in the metro area are up by more than 10% in some of Boston’s densest neighborhoods, including Southie, Dorchester and North End, according McBride.
A growing population has also contributed to the influx of new tenants, according a recent report from the realtor site Zillowing.
Some of the hottest housing markets in the nation have seen their rents rise this year.
According to Realtorable.com, Boston’s average rent increased by 2.5% in May and 3.4% in June.
The average rent in San Francisco, where rents are among the highest in the world, jumped by 6.5%, and New Orleans, where prices are up 11% in a year.
And while the median rent is still higher than what Boston has seen over the past few years, the market is starting to show signs of cooling.
On average, Zilloview found, rents for apartments in Boston are up 2.2% in 2017 over the same month last year — a drop of 3.1%.