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Is it better to buy or rent now in metro Boston?

Buying Renting Spring House Hunt Boston
A view of brick multi-story townhomes with copper oriel windows. Leafy trees are in the bottom left corner of the photo. The view is as seen through a multi-paned window.
Limited inventory because of underbuilding of housing following the aftermath of the Great Recession means there has been a national imbalance of demand far exceeding the available supply. Suzanne Kreiter/Globe staff

It’s not like anyone these days in metro Boston’s highly competitive housing market is walking away with a bargain basement deal.

Limited inventory because of underbuilding of housing following the aftermath of the Great Recession means there has been a national imbalance of demand far exceeding the available supply. It is even more exacerbated in metro Boston, where available land to develop is scarce and the approvals process for any kind of project can be a tedious battle.

Given uncertainties facing the economy, experts say buying can provide more stability over renting — if you can put together a down payment, that is. But if that uncertainty leads to a cooldown on prices, maybe now is a better time to rent. New homes and apartments can’t hit the market fast enough.

In short, the rent-vs.-buy decision is very much a personal call.

“If you’re asking about buying, and we’re looking at prices going up, you don’t want to buy at the top, so to speak. You want to buy it and get value growth. The question is will that continue? The fundamentals suggest that there’s a supply-demand imbalance,” said Jeff Myers, a research director for brokerage firm Colliers. “Conversely, inflation rates are high and mortgage rates are getting higher. That’s going to curtail some of the ability of folks to afford homes. It’s kind of a matter of where do you sit and where do you stand over the long haul.”


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The question of whether it is a better time to rent or to buy stems from a deluge of factors hanging over the housing market. Rising interest rates mean it is more expensive to borrow money to buy a house. But inflation, coupled with that ever-persistent imbalance between supply and demand, is also sending rents higher.

Rent prices increased 12 percent in the last year across metro Boston, while home prices shot up 15.1 percent, according to Zillow. Monthly rents in the area average $2,762, while a mortgage payment on the typical home is currently $2,782.

There is an argument for buyers to still move ahead with a deal, as there is so much uncertainty with pricing. Lock in now before interest rates go even higher — as they are expected to do — and inflation continues to grip the country, the thinking goes.

“As rents continue to rise, the comparison between buying and renting may tilt in favor of buying for those who have the means for a down payment, even in spite of rising interest rates,” said Nicole Bachaud, an economist with Zillow. “Buying a home today with a fixed-rate mortgage can serve as a hedge against housing inflation by allowing buyers to lock in a fixed monthly cost of shelter, insulated from the risks of rising prices, interest rates, and rents.”

Of course, inflation increasing the price of everyday goods makes it harder to save up for a down payment, Bachaud added.

But pandemic bargains in the rental sphere are barely visible in the rearview mirror. That means there isn’t a clear advantage to move ahead with renting.

It’s not as though developers aren’t trying to make the shallow pool of supply a little deeper: At no point since 2013 have fewer than 12,000 apartments been under construction across metro Boston — and that number topped 19,000 in 2019, said Chris LeBarton, director of market analytics for real estate data firm CoStar.

The inventory of metro Boston’s market-rate apartment supply has increased by 20 percent in the past five years, but vacancy rates decreased from 6 percent to 4 percent, according to CoStar. Average rents in that span increased from $2,200 per month to $2,700.

“This should always be an individual decision, and while mortgage rates influence the cost of homeownership, they aren’t the sole determinate of whether someone should buy a home. Like mortgage interest rates, rental rates can move every single day depending on supply and demand conditions,” LeBarton said of the rent-vs.-buy question.

“Many people hear a radio ad that says something to the effect of ‘Rates have never been lower!’ or ‘Buy now before mortgage rates go even higher!’ The individual or a family shouldn’t let FOMO [fear of missing out] guide them into a rash decision on what is almost certainly their most considerable monthly and long-term expense.”

If there is one piece of good news buyers can take, it’s that nobody interviewed for this story is expecting an enormous crash on Boston home values — even if there is chatter of a recession on the horizon.

“Boston’s diverse economy is central to how it weathers downturns — housing or otherwise —and it also has a solid demographic story compared to the country overall,” LeBarton said.

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