Many Students Are Having Difficulty Navigating a Competitive Housing Market

Real estate prices in college towns are making it hard for students to afford housing for the upcoming school year.

More than a third of college students, 35%, say they cannot afford to rent an apartment in their college town this fall. Nineteen percent say their parents are helping them pay rent this year after they didn’t need help last year, according to a Realtor.com survey. Forty-four percent of students blame the real estate market in their college town for these struggles.

Timing is also playing a role in this difficulty finding housing. With uncertainty surrounding whether schools would hold in-person classes, 35% of students delayed confirming fall 2021 housing. Thirty-four percent of students said they hadn’t finalized their housing plans for the fall. Of those students, 22% said they waited too long to secure in-person housing, forcing them to change plans.

Even with housing challenges, students are ready to head back to school, with half of those who lived at home last year planning to move out this fall. But they’re struggling to find the right place, with almost 40% of those planning to live off-campus and away from home saying they looked at six or more listings in person while searching for a place to live. In addition, more than 30% said finding an apartment this year was much more challenging than last year.

At the same time, homes are moving fast, with almost a quarter finding the competition too much to land a rental. 

“The shortage of affordable housing inventory in the US pushed prices to record-highs and forced more prospective homebuyers into the rental market in June, driving the US median rent price to a new high of $1,575, an 8.1% increase year-over-year,” said Realtor.com Economist George Ratiu in a prepared statement. “In addition, many university towns have become attractive destinations for retirees and remote workers, further adding pressure on local real estate markets. With the uncertainty brought about by COVID compounding the rising prices and lower inventory, students are facing a more challenging housing market in their college towns than ever before.”

These fundamentals are, in part, attracting new investment into the sector. 

For example, last week, GMH Communities and CBRE Global Investors fund entered into a programmatic joint venture to acquire existing core and value-add student housing assets for GMH’s Student Living vertical in specific markets across the US.

In the first phase of the partnership, the venture will acquire and reposition student housing communities over the next 18 months.

“With US college enrollment climbing each year, the student housing sector has tended to be resilient through various cycles,” said Kim Hourihan, Chief Investment Officer for CBRE Global Investors’ Americas Direct Real Estate Strategies, in a prepared statement.