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Boston rents may be rebounding as college students return to the city, but the effective cost of homebuying is rising more than twice as fast, according to a new report.
An analysis of MLS and public record home sales data by Redfin, plus rent price data from the company’s RentPath digital marketing firm, shows the average monthly rent in Boston in August was $3,551, up 4.2 percent from August 2020. At the same time, the company reported, the median monthly mortgage payment made with a 5 percent down payment is up 9.3 percent on the same basis.
While mathematical medians and averages are different, however the average price of housing in a wealthy market like Boston is likely to be higher than the median.
“Record high home price growth has priced many renters out of buying, leaving many facing higher rents this summer as more households look to move thanks to the rise of remote and flexible work arrangements,” Redfin Lead Economist Taylor Marr said in a statement. “The end of pandemic eviction moratoriums and mortgage forbearance may also cause landlords to raise rents to cover the risk of future tenant protections or make up for lost rental income.”
Other studies have found even bigger increases in Boston-area rents, with portal site Apartment List reporting the city’s median rent in August was $2,030 for a one-bedroom apartment and $2,163 for a two-bedroom, the latter up 8.4 percent from last August, while the statewide median is up 9.7 percent on the same basis. The biggest jump in Greater Boston rents occurred in Waltham, it reported, with the median two-bedroom going for $2,580 last month, up 15 percent from August 2020.
There’s a catch, though: The median monthly payment on a 30-year, fixed-rate loan in the Greater Boston area is still only $2,472, Redfin found, meaning homebuying is still likely a very attractive option for most renters who can afford it. Nationwide, the average monthly rent of $1,836 is still larger than the $1,494 median monthly mortgage payment for new homebuyers.
