Seasonal Student Housing Pre-Leasing Grows at Normal Pace
It also remains above pre-pandemic trends.
Despite slowing momentum over the past 2 years, U.S. student housing pre-leasing continues to increase at a normal pace for the Fall 2024 term and remains above pre-pandemic trends.
According to RealPage’s June 2024 student housing update, 84.5% of beds at the 175 universities it tracks have been leased for Fall 2024. That compares with 85.8% leased at the same time last year and 86.2% 2 years ago.
Month-over-month pre-lease momentum climbed 6% from May to June, which was above average for the month as leasing activity tends to slow during the summer months when students are away from campus. Last year, the May-to-June increase in pre-leases was 5.5% by comparison.
“The next few months of the pre-lease season could see approximately a 5% jump in pre-lease momentum month-over-month, if the last two summers are any indication,” said the RealPage report.
Properties farthest from campus reported the tightest pre-lease occupancy as of June at just above 85%, the report found. Properties within a half mile of campus (84.5%) matched the RealPage 175 average, while properties within a half mile to one mile of campus garnered the lowest, but still, historically strong, with pre-lease occupancy of 84% as of June, said RealPage.
The annual effective rent growth rate slowed to 4.4% across the 175 universities studied in June. That is the lowest rate seen so far in this pre-lease season, said the report.
“Properties more than one mile from campus continued to report the strongest rent growth at nearly 6% as of June, followed by slightly softer readings at properties closer to campus,” said RealPage.
Last month, RealPage reported that pre-lease momentum for Fall 2024 had dropped below concurrent rates from the previous 2 years and predicted pre-lease growth potential of approximately a 5% month-over-month over the summer.
At the time, 15 schools were already reporting pre-lease occupancy above 90% as of May, including Ole Miss, University of Arkansas, Tennessee, Virginia Tech, Purdue and Auburn, which generally lease up more quickly than average.
The University of Tennessee continued to lead the nation in student housing rent growth at over 25% year-over-year in May, followed by growth above 10% at about 10 other campuses, including Ole Miss, University of Kentucky, Purdue, College of Charleston and University of Arizona.