Greater Boston Housing Report Warns of Stagnation as New Construction Permits Hit Decade Low

Housing permits for new units in Greater Boston have dropped to their lowest level in a decade, according to a new report suggesting the region's supply may soon stagnate.

The Greater Boston Housing Report Card, a joint effort by the Boston Foundation and the Joint Center for Housing Studies at Harvard, paints a difficult picture for a region already grappling with a severe cost-of-living crisis. While rental and home prices have begun to level off, the lack of new construction permits suggests that the supply side of the equation is failing to keep pace with long-term needs.

“There’s a bigger question on what’s the health of the region’s economy in the next few years,” said Luc Schuster, executive director of Boston Indicators, the research arm of the Boston Foundation. “We could see a stagnation or recession.”

Schuster said that while an economic downturn might naturally lower prices, it is not the preferred method for addressing the housing shortage.

The 2026 Greater Boston Housing Report Card — The Boston Foundation

A widening gap in affordability

The data highlights a stark reality for middle- and low-income residents. In the fall of 2026, 32 municipalities in the Greater Boston area saw median single-family home sale prices exceed $1 million. In high-demand enclaves like Cambridge, Wellesley, Weston, and Brookline, those median prices climbed above $2 million.

The scarcity of affordable options is profound. Only six of the 147 municipalities in the Greater Boston region reported median prices below $500,000. To qualify for a home in one of these relatively lower-priced areas, a household now requires an annual income of approximately $180,000.

For those who do not own, the struggle continues in the rental market. Nearly half of all renters in the region are considered cost-burdened, meaning they must dedicate 30 percent or more of their total income to housing costs.

The report identifies several compounding factors straining the market:

Demographic shifts: An aging population, including over 1.8 million residents aged 60 or older, is creating complex needs for both housing and social support.
Macroeconomic pressures: High interest rates and immigration restrictions are altering the economic landscape.
Slowing growth: While fewer immigrants and international students may reduce competition for some rentals, researchers suggest this trend could threaten overall state economic stability.

The fallout from Question 7

If the measure had passed, an analysis from the Tufts Center for State Policy Analysis projected it would have generated approximately 780 new units annually. The Greater Boston Real Estate Board expressed disappointment in the result, noting the restrictions would have effectively excluded 78 percent of Massachusetts’s land area.

Massachusetts construction pace slows after pandemic backlog surge

While Massachusetts saw a surge of 34,561 units added in 2025, state officials cautioned that much of this was a backlog of projects delayed by the pandemic. According to the state housing tracker, the pace of new construction is expected to cool.

Current trends differ greatly from historical averages. From 2015 to 2021, annual permits in the five counties comprising Greater Boston typically ranged between 12,000 and 15,000. In 2025, that number fell to just 7,746 units.

Metric	Historical Range (2015–2021)	2025 Figure
Annual Permits (Greater Boston)	12,000 – 15,000	7,746
Projected 2026 Unit Production	N/A	~22,000

Governor Maura Healey has called for aggressive production, stating the state requires 222,000 new units between 2025 and 2035 to meet growth projections. She pointed to reforms like accessory dwelling units (ADUs) and zoning changes as drivers for the 100,000 homes currently in the pipeline.

However, researchers warn that the most accessible opportunities for development may already be spoken for. “The challenge, though, is permits for future construction appear to be down,” Schuster said, adding that there is an expectation that 2027 and 2028 will fail to meet current production paces.

As the current legislative session nears its end in January, attention turns to the State House. Legislators are currently reconciling versions of an economic development bill that could include incentives for multi-family housing on religious land and broader up-zoning for duplexes. The outcome of these negotiations will likely determine whether the state can break the cycle of sluggish growth that has driven young workers away for decades.