As Sept. 1 approaches, Boston rents are on the rise

Rents are climbing faster than they did last year, even as they fall in other big cities

Moving day is never fun.Nic Antaya for The Boston Globe

As Boston’s annual Sept. 1 turnover date for apartment leases approaches, the news for renters is grim: Rents here are rising faster than they did last year, even as they fall in other big cities, and vacancies are scarce.

The news: The median rent in the city was $2,183 in July, up 2.8 percent from the same month last year, according to data from Apartment List. Since the start of the year, rents have climbed nearly 12 percent, compared with 9.2 percent in the same period in 2022.

(The median marks the price at which half of all apartments are more expensive and half cost less.)

Nationally, the median rent dipped 0.7 percent last month, the first year-over-year decline since the early days of the pandemic in mid-2020, Apartment List reports. Prices fell in 71 of the 100 largest markets it tracks, including Phoenix (down 5 percent), and Austin, Portland, Ore., and Seattle (each down 4 percent).”The surging rent growth we observed in 2021 and early 2022 is now solidly behind us,” Apartment List said.

Behind the numbers: After topping out at the end of 2021, rents have been moderating or dropping in many cities across the country. Demand has eased, and the amount of new inventory hitting the market is high.

But not in Boston.

Rents here tumbled during the great COVID exodus, as they did in other dense, high-cost cities like New York and San Francisco. While prices have rebounded, Boston is still playing catch-up: Rents in the city are 13 percent higher than they were just before the pandemic compared with a national increase of 22 percent, according to Chris Salviati, senior housing economist at Apartment List.

Local market forces: Boston — with its strong job market and high concentration of students and young workers — has long been an expensive rental market. But in the past year or so, a sharp rise in mortgage rates has frozen the home-buying market, making it harder for renters to become homeowners and keeping vacancy rates low. Construction of new units is even more anemic than in the past.

“There is nothing more powerful to drive down rents than supply,” said Demetrios Salpoglou, chief executive of Boston Pads, a real estate information and tech company. “When you see supply dwindling, and landlords know there is not much to choose from and not a lot of turnover, they tend to keep the price higher.”

According to Boston Pads, vacancies have remained below 1 percent since January 2022, an unprecedented stretch. The rate needs to reach at least 2 percent before landlords will be pushed to consider cutting asking rents, the firm said.

Looking ahead: Boston has fallen a few spots since before COVID on the list of cities with the highest rents, but only because other cities have become more expensive, according to Apartment List. Boston rents ranked eighth among the 100 largest US cities in March 2020; as of last month, we were 12th.

But the fundamentals that keep rents high here remain in place. Unless construction — of both single- and multifamily units — picks up, renters won’t see much relief.

Unless. . .

“We are still seeing how remote work is shaking out,” said Salviati, the Apartment List economist. “Boston is one of the markets where there is a strong presence of knowledge sector jobs that can be done anywhere with a computer and the internet. Maybe more people will move farther away since they only have to come into the office once or twice a week.”

And perhaps as a result, rent increases have accelerated in cities not too far from Boston.

In Manchester, N.H., prices have soared 40 percent since March 2020. Both Worcester and Providence have seen rents climb 25 percent in the same period. “At a certain point there is a limit to how much people in Boston can afford to pay,” Salviati said.