Boston Multifamily Market Report

Demand outweighs supply; new initiatives recently enacted. Boston’s more cycle-resistant economy, anchored by world-class educational and health care institutions, is expected to drive new rental demand despite broader uncertainties. A vibrant local retail environment, new return-to- office mandates and corporate expansions by firms such as Amazon and Moderna will further aid the appeal of apartments in the urban core. Growing business hubs that offer lower housing costs such as Waltham — highlighted by Welch’s planned relocation to the area this spring — are also likely to attract renters to the suburbs. These factors are expected to keep demand for apartments ahead of new supply, with metrowide inventory growth projected to remain under 2 percent for the fifth consecutive year. Although the MBTA Communities zoning law removed some impediments to development, high construction and financing costs have tempered these efforts. A statewide $5 billion housing bill passed in August 2024 could spur local construction activity, however, as it will fund affordable housing, incentivize office-to-residential conversions and legalize accessory dwelling units over the next five years. In the near term, easing inflationary pressures will revive household formation in Boston, supporting tighter vacancy and improved rent growth.