Multifamily Rent Growth in Boston Remains Positive Amid Elevated

The apartment market in Boston remained balanced in the third quarter, with roughly 2,700 units absorbed, nearly offsetting the 2,800 units delivered and holding vacancy steady at 4.4%. Renter demand was strongest in high-supply urban submarkets such as East Boston, Chelsea, and Allston–Brighton, where new construction drove elevated leasing activity. South Shore, South Plymouth County, and Quincy also posted solid gains, reflecting steady interest in lower-cost suburban options. Following job losses in the first half of the year, the labor market posted modest gains in the third quarter, and Boston is projected to close 2025 with net positive employment growth. The rental market is on track for its largest delivery total since 2020, which may overshadow absorption in the coming quarters. Still, with permitting down and fewer starts moving forward, a shrinking development pipeline is likely to ease pressure and support rent growth beyond 2025.

Sales activity in the Boston multifamily market slowed in the third quarter, though the trailing 12-month offer count rose to its highest level since 2022, lifted by a surge in dealmaking late last year. So far in 2025, Class B and Class C properties have accounted for the majority of transactions, representing approximately 50% and 27% of total offer activity, respectively. Transaction counts during the past year increased 20% from the prior 12-month period, though activity remains below the highs posted in 2021 and 2022. Transaction activity has been concentrated in the Everett, Malden, Medford, and Melrose submarkets, as well as the Metro West area, two areas where pricing has moved higher in recent months. Out-of-state investor participation nearly doubled year over year, reflecting increased institutional interest in assets over $10 million, particularly in transit-served, professionally managed communities with stable renter demand.

Looking ahead

Multifamily construction in Greater Boston is expected to outpace last year’s total by about 12% in 2025, but supply pressures are projected to ease significantly in the coming periods. Permitting activity has slowed, with developers expected to pull permits for only about 6,000 units this year, well below the region’s annual average over the past decade. A thinning development pipeline should support market stability, with vacancy rates for this year and 2026 expected to closely track the Boston area’s 10-year average. Recent rent trends have been uneven, but the market is expected to record its third consecutive year of annual rent increases of approximately 2.5% in 2025. While these fundamentals support the metro’s traditional position of strength, investors are aware of and will monitor a new statewide initiative for a potential 2026 ballot measure on rent control. The proposal, which cleared its first hurdle in September, could alter the market’s long-term rent growth outlook if it passes.

Transaction velocity should improve through year end as steady vacancy and firmer rents support underwriting. offer flow is likely to concentrate in South Boston, the Seaport, and Downtown, where the listing pool is deepest and assets skew toward institutional quality. Large mixed-use projects coming online or nearing completion, including South Station Tower, Winthrop Center, and the buildout around Fenway Center, are adding transit access and amenities in core locations, supporting pricing for larger offerings and creating spillover demand for nearby middle market assets. Together, these trends widen the potential buyer base, private capital keeps middle market trades moving, and institutions are moving back into core assets as pricing firms and offer execution becomes more predictable.