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

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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.

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  • Sam Shampine, 2025. "New England’s Housing Markets: Supply and Demand Factors Affecting Housing Prices across the Region," New England Public Policy Center Policy Reports 25-1, Federal Reserve Bank of Boston.
    • Handle: RePEc:fip:fedbpr:99621
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    References listed on IDEAS

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    1. Giovanni Favara & Jean Imbs, 2015. "Credit Supply and the Price of Housing," American Economic Review, American Economic Association, vol. 105(3), pages 958-992, March.
    2. Nicholas Chiumenti & Aradhya Sood, 2022. "Local Zoning Laws and the Supply of Multifamily Housing in Greater Boston," New England Public Policy Center Research Report 22-1, Federal Reserve Bank of Boston.
    3. Nuno Martins & Ernesto Villanueva, 2009. "Does High Cost of Mortgage Debt Explain Why Young Adults Live with Their Parents?," Journal of the European Economic Association, MIT Press, vol. 7(5), pages 974-1010, September.
    4. Andreas Fuster & Basit Zafar, 2021. "The Sensitivity of Housing Demand to Financing Conditions: Evidence from a Survey," American Economic Journal: Economic Policy, American Economic Association, vol. 13(1), pages 231-265, February.
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