Only 1 in 7 renter households in Boston-area can afford ‘starter home,’ report finds

Only one in seven renter households in the Greater Boston area can afford an “entry level” home, as affordability issues continue even while construction increases, according to the 2025 Greater Boston Housing Report Card released Wednesday.

“This year’s report data highlights some significant differences among housing construction, permits, and prices,” said Luc Schuster, executive director of the research arm of the Boston Foundation.

“While new data from the U.S. Census Bureau shows a significant uptick in new home completions in recent years, the increase has not significantly helped home affordability, and a decline in the number of new housing permits statewide suggests any construction uptick could be short-lived,” the executive director added.

The annual housing report, conducted by the Boston Foundation, found that Massachusetts created just under 98,000 housing units between April 2020 and July 2025, with about 71,000 in Greater Boston.

The pace marks a “meaningful increase” and “would put Massachusetts within striking distance” of meeting the state’s goal of building 222,000 new units between 2025 and 2035, the report stated.

“But permits, which signal future housing construction, are way down,” the report states. “New permits as of July 2025 are running 44 percent below levels for the same period in 2021.”

Building permits were at just over 14,000 in 2024, down from the peak of nearly 20,000 in 2021, according to the report. In Greater Boston, under 9,000 units were permitted in 2024, below the about 15,000 permitted in 2021.

“It’s a real sort of pairing of a good news, bad news story,” said Schuster. “Good news is that we’ve built significant new housing in the last few years, making a bit of a dent in our housing shortage, but there are real warning signs around whether that will continue into the future.”

Despite the modest increase in housing construction, “Greater Boston’s housing affordability crisis has only worsened since the pandemic,” the report shows.

In 2025, home prices and rents have broadly leveled off but remain at unaffordable high levels, the data shows.

Whereas in 2021, a household earning about $98,000 could buy a home at the low end of the market with a $2,520 monthly payment, a household this year would need to earn over $162,000 to afford the $4,200 monthly payment on the starter homes.

“You can see that we’ve cut by almost half the number of renter households who can afford an entry level home in just four years,” said Schuster. “Also look as one example, for Black households in 2025, we estimate just a little bit over 8,000 Black families that are renter households in Greater Boston can currently afford an entry level home. So a whole lot of dire consequences of these trends in recent years.”

The share of renter households able to afford an entry level home fell from 30% in 2021 to 15% in 2025, the report shows.

The “sobering reality of this combination of price increases and higher mortgage rates,” Schuster said, is just one in seven households in Greater Boston are able to afford a starter home in the region.

“The data show just how much work we have to do if we are to expand opportunities and unfreeze the market,” Schuster said.

Lt. Gov. Kim Driscoll spoke on the report’s finding Wednesday, citing the administration’s work on a “comprehensive housing plan,” the $5.2 billion invested in the Affordable Homes Act passed in 2024, and the MBTA Communities Law requiring housing around public transportation.

The report also examined the MBTA Communities Law, highlighting the tactics 177 cities and towns have taken to meet it, some through zoning changes rather than construction.

“There are lots of intractable challenges within government,” said Driscoll. “Building more housing isn’t one of them. It really isn’t. It should not be as hard as it is. And I think for us to solve this, we’ve got to work together, and that means local officials, state officials, certainly are in a position to drive policy, folks who are building housing, those who are developing housing. There is a path forward.”