Rising vacancies, slower rent growth, and increased concessions point to changing market conditions across the region
BOSTON — Greater Boston’s multifamily housing market is showing signs of shifting in favor of renters as vacancy rates climb, rent growth slows, and landlords increase concessions, according to Colliers’ Greater Boston Q1 Multifamily Report.
The report found that the region’s multifamily vacancy rate rose to 6.9% in the first quarter, an increase of 80 basis points year over year. The rise was driven largely by slower leasing activity combined with a wave of new apartment deliveries stemming from post-pandemic development projects.
As supply continues to enter the market, annual rent growth has nearly stalled, increasing just 0.3% year over year — one of the weakest growth rates recorded in nearly five years. At the same time, landlord concessions reached 2.1% of asking rent, the highest level seen since early 2021.
According to the report, the market’s recent softening reflects changing economic conditions as rising inflation and slower job growth weigh on household formation and renter demand.
“Multifamily market fundamentals are shifting in favor of renters,” the report stated, noting that the combination of elevated supply and slower leasing momentum has extended the timeline for market recovery.
Despite the increase in vacancy, Colliers researchers noted signs that conditions may be stabilizing in some areas as the construction pipeline begins to shrink. Fewer new projects entering the market are expected to reduce competition among newly delivered buildings and give existing developments more time to lease units.
Some submarkets are already showing signs of improvement. Areas that experienced significant apartment construction during the pandemic-era development boom — particularly the Inner Suburbs — saw occupancy levels begin to recover during the quarter. Vacancy in the Inner Suburbs declined by 50 basis points, signaling stronger leasing momentum.
Boston proper also recorded modest improvement, with vacancy declining to 5.4% during the quarter.
The report also highlighted broader concerns that could affect the region’s housing market in the coming months, including legislative policy changes and broader economic uncertainty that may impact employment growth and housing demand.
While renters may benefit in the near term from increased housing options and more favorable leasing incentives, developers and property owners continue to navigate a more competitive and slower-moving market environment across Greater Boston.
