The apartment rental market is softening across market segments, from market-rate to affordable housing, and student housing is no exception. New research from Zillow shows that apartment rents in college submarkets are down .5% year-over-year as of August, the first time that college area rents have decreased since 2017, which was the first year that Zillow began collecting data. In addition, there is now a 3.4% gap between college area rents and non-college area rents, the steepest decline in compared to market-rate areas rents since 2017.

Online education has fueled the decline in apartment rents and apartment demand in college towns. According to The Chronicle of Higher Education and Davidson College, 44% of colleges and universities are operating fully online, and only 27% of schools are operating classes primarily in person. The Zillow report suggest that online education is hampering demand in areas where at least 20% of the rental population are students. By comparison, rents in areas with a lower portion of college students actually saw an increase of 2.6% in rental rates.

The decrease in rental rates is even more significant in more expansive markets. In Boston's 02115 ZIP code, which is home to Northeastern University, rents have decreased 7% since the start of the pandemic. In Berkeley's 94704 zip code, home to the University of California, Berkeley, rents have decreased 5% since the start of the pandemic.