Boston’s housing market is bracing for deeper strain as new construction activity slows dramatically, threatening to intensify the region’s long-standing affordability crisis. Despite a period of strong production following the pandemic, builders are now pulling back sharply from filing new permits, according to the 2025 Greater Boston Housing Report Card released by The Boston Foundation.
The report shows that Massachusetts has added nearly 98,000 new housing units since 2020 — with more than 71,000 of those built in Greater Boston. The progress aligns with Gov. Maura Healey’s ambitious Affordable Homes Act, which aims to create 222,000 homes by 2035. But researchers warn these gains are overshadowed by the downturn in permits, signaling a looming shortage of future supply.
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Data from Boston Indicators, the foundation’s research arm, paints a stark picture: permits across Greater Boston have dropped nearly 67% in just three years, plunging from 15,019 in 2021 to fewer than 9,000 in 2024. As of mid-2025, permitting levels were running 44% lower than the same point in 2021, suggesting that builders are growing more hesitant in the current economic climate.
The report cites several pressures contributing to this pullback, including higher construction costs tied to the Trump administration’s elevated tariffs and the potential for labor shortages due to restrictive immigration policies. Together, these forces “threaten to push production costs even higher and slow development to a crawl,” the report warns.
Realtor.com® senior economist Jake Krimmel pointed to structural roadblocks that have persisted for decades. “Overly restrictive and archaic zoning laws, a historically pervasive not-in-my-backyard culture, and recent increases in construction costs have curbed new construction in the metro,” he said.
Greg Vasil, CEO and president of the Greater Boston Real Estate Board, echoed this sentiment and emphasized how deep local resistance to development remains. While many communities claim to support new housing, Vasil says the reality is more complicated. “Unfortunately, in Massachusetts, we can be very progressive thinkers, but we can be sort of parochial in the way we live our day-to-day life,” he told Realtor.com.
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That reluctance, he says, is worsening the region’s lack of housing mobility — a dynamic that restricts homeowners from moving up or down the ladder as their needs change. “So you don't have people being able to leave an apartment and transition into a small house, and then as a family grows, go to a bigger house,” Vasil said. “And then there are no real options for empty nesters to downsize into something in their community that's more affordable for them as they approach retirement on a fixed income.”
He warned that this dynamic, often shaped by older generations who prefer their low-density neighborhoods unchanged, prevents Boston from evolving into the global city it aspires to be. “I try to explain to them, if you're going to make Boston a world-class city, it's got to change. It can't look the way it did for you guys in the '70s and the '80s,” he said.
The consequences of this slowdown are already visible in rising prices and widening affordability gaps. In October, Boston’s median list price hovered just under $800,000 — the fifth highest among major U.S. metros and the costliest outside California.
Even with the recent wave of new construction, Boston’s affordability has continued to deteriorate. According to The Boston Foundation, a household must now earn more than $162,000 to afford a starter home, compared with $98,000 four years ago. As a result, only 15% of renters in Greater Boston can qualify for an entry-level home today — half the share in 2021.
Luc Schuster, executive director of Boston Indicators, summarized the concern bluntly: “The sobering reality of this combination of price increases and higher mortgage rates is that just 1 in 7 renters in Greater Boston has the income to access a 'starter home' in our region,” he said.
Renters who remain in the multifamily sector are also under increasing strain. Nearly half are considered cost-burdened, spending more than 30% of their income on housing. Over a quarter spend more than half of their income on rent and utilities, according to recent U.S. Census data.
These patterns contributed to Massachusetts receiving an F grade on Realtor.com’s State-by-State Housing Report Card for 2025 — a reflection of deepening affordability challenges.
While the Healey administration has taken steps to accelerate development — including identifying 450 acres of surplus state land for potential housing — local leaders say political headwinds remain. A proposed 2026 ballot initiative that would enact rent stabilization could create new uncertainty for developers, Vasil cautioned.
“If that were to pass, it would change everything because you would not see rental housing production in Massachusetts,” he said, arguing that new controls would reduce investor appetite for risk.
For now, Boston faces an uneasy crossroads: a lack of future supply, rising construction costs, and persistent neighborhood resistance — all of which threaten to deepen the region’s affordability crisis unless policymakers, communities, and developers find new ways to align.
Originally reported by Snejana Farberov in Realtor.
