Q225 Boston Multifamily Market Report

Boston Multifamily Market Overview

The second quarter followed the positive absorption trend from Q1 2025, with 1.2K units absorbed. Areas recording the strongest demand include the 495 South, Somerville/Charlestown, and East Boston/Chelsea submarkets. The stable leasing activity aided the vacancy rate, as well as rent growth. Now, rent growth notes a rate of 2.1% year-over year, which drove the market rent to $2,972 at the end of the second quarter. This positive rent growth, among the highest in the nation, continues to attract investors to Greater Boston.

Highlights

New residents aided the metro, with 2024 recording the largest population uptick since the early 2000s.
Metro West, Lowell/Dracut, and Lawrence/Haverhill record the highest rent growth in the 4% to 5% range.
Boston’s multifamily sector is undergoing one of the lowest construction pipelines in years.
The labor market remains strong with an unemployment rate of 3.9%, due to a variety of employment opportunities.

Rents | Vacancy | Construction

Boston’s 6.1% vacancy rate for the second quarter dropped by 0.7% over the past 12 months, ranking it below the national rate of 8.2%. However, vacancy is diﬀerent across multifamily tiers. Higher-tier properties recorded the highest vacancy rate at 8.7%, but this is expected to decrease throughout the rest of the year. Meanwhile, the Class B segment’s level has increased and recorded vacancy of 5.4%. Boston’s rent growth of 2.1% is outpacing the national average of 1.0%. Rents are also forecast to accelerate through the rest of the year, further aiding Boston’s strong performance.

Construction activity is still low, with 14,000 units on the way. About 40% of the units under construction will be delivered in the Everett/Malden/Medford/Melrose, Route 1 North, 93 North, and Somerville/Charlestown. Then, the remaining new units are undergoing construction in the Allston/Brighton submarket. The largest project on the way is ongoing in the South Boston submarket. It is scheduled for delivery in December 2025, and it will be a Class A apartment complex made up of 636 units. Moving forward, Class B and C properties will make up the rest of the construction pipeline.

Stable fundamentals lead to a positive forecast for Boston.

Boston Vacancy Rate

Source: CoStar Group, Inc.

Boston Rent Per Unit and Rent Growth

Source: CoStar Group, Inc.

Multifamily Transactions

The $4.5 billion in sales recorded over the past 12 months has surpassed the $3.4 billion level from 2023. Private capital investors remain as the top buyers, followed by public and institutional investors. However, the current market sale price of $452,000 per unit is down from previous levels recorded in Boston. Sales varied in the second quarter, but the highest transaction occurred in April. This deal was for The Kendrick, which is located in the Metro West submarket. The property is made up of 390 units, and it sold for $181.8 million.