New England’s Housing Markets: Supply and Demand Factors Affecting Housing Prices across the Region

The goal of this report is to improve our understanding of housing affordability in New England by exploring the supply and demand factors influencing housing prices around the region. In recent decades, and particularly since the COVID-19 pandemic, the region has seen substantial increases in both the supply of and demand for housing. For example, the number of newly issued building permits in New England relative to population changes has reached its highest level in four decades. On balance, however, the demand for housing has outstripped the supply by a wide margin. Rental vacancy rates have been falling over time, but for many of the region’s metropolitan areas, this trend has intensified in recent years. Additionally, prices of single-family homes in New England rose roughly 50 percent from the first quarter of 2020 to the first quarter of 2024. When we trace out the association between supply and demand factors and housing price changes across the region, we see that prices have risen fastest in places where migration increases have been the largest, and that prices have tended to rise more slowly in the metropolitan areas that have seen rapid growth in the number of building permits relative to the size of the local population. In this report, migration refers only to the relocation of people to, from, and within New England. An analysis parsing domestic versus international migration trends in New England is beyond the scope of this report.