One of Greater Boston’s biggest apartment landlords said average rents have risen by double-digits in the past year, with “robust pricing power” driving increases earlier in the year than usual.
Equity Residential said the median rent rose 11.6 percent to $3,215 at its 27-building portfolio, comprising nearly 7,200 apartments in Greater Boston.
Renters across the U.S. have fewer alternatives as rising mortgage rates and single-family home prices put home ownership further out of reach, Equity Residential CEO Mark Parrell said during a conference call to discuss the company’s second-quarter earnings.
“Single-family housing starts are declining. Existing homeowners are more reluctant to sell due to low locked-in mortgage rates, along with minimal and expensive for-sale replacement options, and competition for homes from investors remains strong,” Parrell said.
Boston surpassed San Francisco as the second-most expensive of the nine metros where Equity Residential has apartment portfolios. New York tops the list with average rents of $3,995.
Executives at the Chicago-based multifamily REIT said this week that demand is ramping up in both the core Boston and suburban submarkets. The occupancy rate hit 96.8 percent, an increase of 0.8 percent.
“The market continues to have strong employment with life sciences continuing to expand their footprint,” Chief Operating Officer Michael Manelis said during the earnings call.
Greater Boston rent increases have begun to moderate, but are expected to reaccelerate in August as the student population returns, Manelis said.
Apartments listing portal BostonPads reported this month that the city’s vacancy rate has dropped to a near-record low 0.47 percent as the widespread Sept. 1 turnover date for leases approaches. The listing service said average rents have risen nearly 7 percent since June 2021 to $2,695.
The record low vacancy rate of 0.42 percent in BostonPads’ database was set in August 2019.