Houses for Rent in Boston – Second Highest in Rates in U.S.

Houses for rent in Boston can become great investments for savvy investors who can navigate the ins and outs of real estate investments in a city like Boston. As rental rates increase further, owners of rental properties can expect more profits.

According to the 2009 housing report released by the Boston Foundation, rental rates in Boston have surpassed New York rates to become second in ranking to San Francisco, which charges the highest rates in the U.S.

Despite the drop in home prices in Boston by nearly 20 percent from home price levels in 2005, Boston remains among the most unaffordable cities to live in the U.S.

Barry Bluestone, Public Policy and Urban Affairs dean at Northeastern University, explained however that rents and other types of costs in Boston have increased relatively because rents and prices in other cities have fallen sharply.

Bluestone, who co-wrote the Boston Foundation report, said that the increase in foreclosure homes over the past years have pushed up the need for houses for rent, increasing competition among renters and pushing up rents. Rental rates soared by 11 percent in recent months compared to the April to June quarter in 2005.

The dean also contended that it will take about four or five years for rental rates and home prices to go back to their levels in 2005 if the current situation of the housing market stays the same.

Nevertheless, as home prices continue to improve in many cities across the country, home prices in the Boston metro area can continue stabilizing especially if the purchase of new homes picks up.

To encourage first time home buyers and young people to buy homes, Bluestone recommended a home insurance program under which the federal government covers 90 percent of what homeowners will lose if they are forced to sell their homes after three years. He argued that the proposed program is much cheaper for taxpayers than the federal $8,000 tax credit initiative.

Bluestone also suggested that the city expands its voucher programs so it can help renters afford the rising rental rates. He also called on city officials to address the issue of new housing stock.

Additionally, he explained that young people will be the crucial group that can spur growth in any city and they are expected to choose the cities they will move to depending on job and educational opportunities and the availability of affordable houses for rent and homes for sale.