As we approach the half-way point of 2023, Boston’s apartment rental market has reached a new milestone. The average rent price for has surpassed $3,000 for the first time on record. As of May 1, Boston’s average rent price has increased by $150 since January 1 and is now up +15.55% compared to a year ago.
Boston’s average rent price is calculated by taking the average of: studio, 1 bedroom, 2 bedroom, 3 bedroom and 4 bedroom prices. To ensure the highest accuracy, these average rent prices exclude luxury apartment buildings which often have wild fluctuations in pricing on a daily basis.
A look at the historical trend line for this average rent figure shows that prices have accelerated significantly once pandemic restrictions were lifted in late 2021. Prices did fall during the pandemic years as rental demand was negatively impacted by distance based learning and remote work. Since apartment demand has returned to Boston, we’re seeing an unprecedented acceleration in rent price growth.
So why is rent price growth outpacing the years prior to the pandemic? There are several forces at play here.
Record Low Apartment Availability
We mentioned this trend in our 2023 apartment rental market report as a main issue affecting Boston’s average rent price. Last year, Boston’s real-time availability rate (RTAR) peaked at 4.97% in late April, marking the first year on record that apartment availability did not surpass 5%. This year, the current RTAR is at 4.32% as of May 1, down -10.74% from last year. That figure typically begins to turn downwards in May, which would mean that in 2023 we saw another year of record low apartment inventory.