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The local downturn in multifamily construction is substantially worse than the national trend, according to a new report from Realtor.com
In 2024, Greater Boston municipalities – defined by Realtor.com as the five Greater Boston counties in Massachusetts plus Strafford and Rockingham counties in New Hampshire – issued building permits for 7,022 multifamily units, a 22.3 percent decrease compared to the region’s average over the last five years.
The listings portal’s economists used data from the Census Bureau’s building permits survey.
Within the 50 biggest U.S. metros, only 294,000 multifamily units were permitted in 2024, Realtor.com said: a 7.5 percent drop from 2020.
“During the pandemic, rent prices surged significantly. While there has been a gradual correction, the current trend of declining rents over the past 19 months and a still-sizable number of multi-family units under construction have impacted builders’ enthusiasm for new projects,” Realtor.com Chief Economist Danielle Hale said in a statement. “The nation is short 3.8 million homes according to Realtor.com research. As builders attempt to right-size their construction pipelines amid shifting economic and policy cross currents, multifamily builders nationwide have made headway, evidenced by vacancy rates trending up. Still, the shortfall varies by market and region. The low level of permitting for multifamily housing, particularly in markets where rents are still climbing, may become a catalyst for future rent growth.”
While permitting in Boston has dropped, Connecticut’s biggest metro area is seeing a steady growth of multifamily units. Greater Hartford municipalities gave building permits to 1,488 units, an 89.2 percent increase over the average for the last five years.
Even though a lack of permitting could see rents rise, nationally there appears to be a flattening of prices. Rents have grown since 2020 but year-over-year they remained relatively flat. The national median rent currently sits at $1,691, a 0.9 percent decrease year-over-year.
In Greater Boston, Realtor.com pegged the February median monthly rent for studios, one-bedroom and two-bedroom units combined at $2,936, up 0.7 percent year-on-year.
