Student Housing Market Shows Mixed Signals for 2024-25 Academic Year

As a wave of students prepared to head to their colleges at the end of summer, they faced a student housing market with significant variations, according to Yardi Matrix’s national student housing report.

Preleasing for the 200 schools, Yardi’s monitors were 5% behind the 94.6% occupancy level scored in July 2023, only reaching 89.2% this year. But 41 schools beat their 2023 levels, including 18 that had occupancy below 90% last year.

Even though student housing performance was weaker than previous highs, Yardi said it remained strong and more robust than historical norms.

As of July, 19 schools were 99% preleased, which was 10% or more higher than 2023 at 24 universities. The highest growth in preleasing was at the University of Nebraska, Bowling Green State, Illinois State, the University of Missouri, and Mississippi State.

On the negative side, preleasing was 10% lower at 31 colleges where it averaged just 73.1% compared to at least 90% in 2023. While many were in smaller markets, the list included Oregon, Clemson, UNC-Greensboro, and Arizona State University. In addition, 25 markets were less than 75% preleased, including the University of Texas at Arlington and West Coast schools that start classes later like the University of California, Berkeley and Washington State University.

Average advertised rent rose 4.7% to $897 this year. However, student housing rent growth of 7% earlier in the season, later slipped along with preleasing, to an average 6% during the season.

“In a handful of markets, strong rent increases have come at the expense of slower preleasing this year than last year,” the report noted. “A few schools with rent declines are also behind on preleasing.” Others have seen increased preleasing along with lower rents.

Yardi cut its earlier forecast for bed deliveries in 2024 by 6% to 41.432, 5% below 2023 levels, and also lowered its forecast for 2025. Though it predicted an increase of 33,805 beds in 2026, that was below the long-term average of about 40,000 beds a year – a trend expected to continue into 2027-2029 with just 38,000 beds a year anticipated.

Schools do expect an impact on enrollment in 2025 or 2026 when high school graduation rates are projected to peak. Confusion and delays associated with the new FAFSA form could also affect enrollment.

The student housing market has remained strong, however.

“Following excellent performance in the sector in recent years, transaction volume through July 2024 is matching last year’s pace,” Yardi noted. “There have been 45 properties sold so far this year, about even with last year, at an estimated average of $81,627 per bed.”