Boston’s multifamily market is regaining balance after a period of uneven supply and demand. Steady leasing over recent quarters has applied downward pressure on vacancies, which now stand at 6.3% after falling 80 basis points in the past year. With supply stabilizing, rent growth has started to strengthen again, pointing to a healthier long-term outlook.

Absorption has averaged around 2,000 units annually, or just over 2% of inventory. While this is below the 2015–2019 average of 3.4%, demand remains solid across several key areas. Submarkets such as Somerville/Charlestown, Allston/Brighton, and southern suburbs including Quincy and the South Shore have led leasing activity, while Back Bay and the South End have also seen improvement. Weaker demand persists in Downtown Boston and parts of the northern suburbs.

After supply growth outpaced absorption in 2023, the imbalance has eased, signaling improved fundamentals. Boston’s vacancy rate is now more than 250 basis points lower than the national average, which has been pressured by significant new construction in Sun Belt metros. This stability underscores the market’s resilience compared to broader U.S. trends.

Rent growth has moderated from near double-digit highs in 2022 to 1.9% today, but still outpaces the national rate of 0.9%. With momentum expected to pick up again later this year, investors have remained active. Investment sales have included several high-quality properties, even as higher interest rates and rising cap rates have placed downward pressure on values.

Looking ahead, Boston is positioned to remain one of the stronger-performing multifamily markets in the country. Investors and owners who can navigate the current rate environment stand to benefit from stable demand, a competitive vacancy position, and rent growth that is expected to outperform. Contact our team today to discuss opportunities in Boston’s multifamily sector and how current trends may align with your investment strategy.