Troy Boston/Photo courtesy of Equity Residential

One of Greater Boston’s largest apartment landlords said high mortgage rates are keeping tenants out of the home ownership market longer and driving recent rent increases.

Equity Residential said strong demand in its urban portfolio drove a 7 percent increase in local rents during 2023.

“Our target renter demographic remains in good shape. They are likely to rent with us longer as the prospect of home ownership in the near-term seems less likely with scarce inventory and relatively high mortgage rates,” CEO Mark Parrell said in a call with analysts to discuss the company’s fourth-quarter earnings.

Less than 8 percent of departing tenants cited home purchases as the reason for leaving, Parrell said.

The Chicago-based REIT owns more than 80,000 apartment units nationwide, primarily in pricey coastal markets. Greater Boston’s rents are already the second-highest in the company’s portfolio after New York, ending the year with an average monthly rate of $3,422. The occupancy rate was 96 percent.

In contrast to San Francisco and Seattle, where Equity Residential has been forced to offer rent concessions, the company’s urban Boston portfolio continues to see strong demand. The company’s Boston properties include the Alcott, Avenir, Troy Boston and 315 on A complexes.

Executives said they expect rents at the company’s nearly 7,200-unit Greater Boston portfolio to rise another 4 percent in 2024.

“This is a market where our urban assets have outperformed suburban ones lately and we expect that trend to continue in 2024,” Chief Operating Officer Michael Manelis said.

Limited new supply of multifamily housing will drive the additional rent increases in Boston along with Orange County, San Diego and Washington, D.C., Manelis predicted.