Boston Rents Projected to Rise by Nearly Three Percent in 2016
Sorry, Boston renters, your rent will probably still increase this year, but because the market feels like Mr. Brightside, it won’t be by as much as last year.
A new report from the real estate tracking company Zillow projects Boston rents will increase by 2.7 percent this year to $2,309, up from $2,247 in December 2015. The projected 2.7 percent increase is down from the 6.6 percent increase the company tracked in 2015. The slowdown in the increase of rental rates is possibly an indicator that the flood of new housing units entering the market is meeting the sky high demand for housing in the Greater Boston area.
These numbers from Zillow mean someone making the Greater Boston median income of $74,494 pays nearly 40 percent of their annual income towards housing costs if they live alone. Boston’s high housing affordability burden puts it in the same category as the Los Angeles, San Francisco, and San Jose metropolitan areas. Rental increases in those regions are also down from 2015 levels.
The rate of increase in Boston is above the national rate of increase of 1.1 percent that Zillow projects for 2016. Zillow pegged the median American rent at $1,381 for 2016. “Zillow is forecasting a decrease in the rate of rental appreciation amid a rental affordability crisis that has renters in some markets spending almost half of their income on rent. Some of the fastest growing metros had double-digit annual rental appreciation at the end of 2015,” said the report.
Renters looking for a home of their own in the Boston area will face a similar struggle, as Zillow’s report found home values rose 5.6 percent to $382,900 in 2015. The median home price in the United States is $183,500 according to Zillow, making Boston one of the most expensive regions in the country by their measurements. Zillow defines the Greater Boston area as a region stretching from southeastern New Hampshire to the South Shore of Massachusetts.
Zillow projects the markets with the highest rent increases in 2016 will be San Jose, Buffalo (yes, really), San Francisco, Seattle, and Portland.