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Asking rents continued to increase thanks to Greater Boston’s highly restricted supply of apartments. But they could go even higher due to President Donald Trump’s tariffs and related economic uncertainty.
According to new data from Redfin, the typical rent in in Greater Boston increased 6.9 percent year-over-year, to $2,787 in March. With tariffs, rents around the country could join the commonwealth in trending upwards.
Analysis by Realtor.com shows that multifamily construction in the Boston area was already falling much faster than around the country this year as developers run into continued high interest rates and other costs.
And Massachusetts bank and credit union leaders say they expect the Trump administration’s trade war to cause a slowdown in housing construction by blowing out approved projects’ budgets. It comes as local developers say construction costs and municipal zoning and affordability and green building requirements have kept even projects that could pencil at higher interest rates from breaking ground.
“America gets a lot of building materials from other countries, so tariffs will make building apartments more expensive. That could further hamper apartment supply, causing rents to jump,” Redfin economics research lead Chen Zhao said in a statement. “Tariffs could also drive up rents by increasing demand. People may opt to rent instead of buy homes because the turmoil around tariffs has fueled widespread economic uncertainty. Tariffs have already caused huge swings in the stock market, and they will lead to higher prices for many goods and services, along with increased unemployment.”
The median asking rent in Boston is the third-highest in the United States, according to Redfin’s analysis of rents in the top 44 most populous metros in the country. The median asking rent per square foot in Boston is also the fifth-highest in the nation ($3.32).
While rents increased in Boston, nationally they decreased by 0.6 percent year-over-year to $1,610. March also marked the 13th-straight month in which asking rents remained relatively flat thanks in part to continued delivery of newly-constructed rental units in Sun Belt communities.
Additionally, the median asking rent for studio and one- bedroom apartments fell 0.9 percent year over year to $1,467, for two-bedroom apartments, it decreased 0.5 percent to $1,690, and for three-bedroom apartments, it fell 0.4 percent to $1,997.
