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The student housing sector has maintained a solid performance through the second quarter, recording strong rent growth and preleasing performance that are up slightly from 2022.

According to the latest National Student Housing Report from Yardi Matrix, June marked the fifth consecutive month of annual rent growth over 7% at Yardi 200 universities—coming in at 7.2%. The average rent per bed was $846 at the end of the second quarter, $4 above May’s average rent and a new all-time high.

Three Yardi 200 universities with four or more properties saw annual rent growth of more than 20% in June: Purdue University at 26%, University of Arkansas at 22.7%, and Arizona State University-Tempe at 21.4%.

The universities that have struggled with rent growth faced both a decline in enrollment in fall 2022 as well as an increase in new supply. This includes the University of Southern California, with annual rent growth at -11.8% This is attributed to a 0.8% loss in enrollment as well as the completion of Hub LA Coliseum, which added 230 beds last year. Two additional properties are expected to come online this year.

In addition, as of June, 86.6% of beds at Yardi 200 universities were preleased for the fall term, rising 5.6% from May and a slight 0.4% year-over-year increase. Six Yardi 200 universities with four or more properties were fully leased as of June, with another 14 that were over 95% leased.

However, some universities are struggling with leasing. Louisiana Tech University was only 50.8% preleased as of June, down 12% year over year, while Boise State University saw the greatest loss in preleasing, down 22% compared with last year.

“Under the surface of solid overall fundamentals at the Yardi 200 level is mixed performance at individual schools, as some universities are doing exceptionally well while others fall short. Performance at the university level is mainly correlated to local supply-and-demand dynamics rather than higher-level trends,” stated Matrix analysts.

The off-campus student housing development pipeline continues to expand across the nation despite higher interest rates and a tighter lending environment. As of early July, approximately 153,000 bedrooms were in various stages of development, an increase of about 28,000 from the start of 2023.

The University of Texas at Austin continues to have the most bedrooms under construction, with nearly 6,000 beds in six properties, followed by Indiana University-Bloomington and Florida International University.

However, the sector is being hit by current economic conditions on the transaction front. According to the report, through the second quarter, there had only been $646 million in student housing transactions at Yardi 200 universities, down 73% year over year. Although investment has dropped significantly, the average sales price per bed has only fallen a little over $3,000 from a year ago to approximately $66,000 per bed.

Transactions at ASU-Tempe made up almost a quarter of all student housing sales through the second quarter. The average sales price per bed on the transactions was a premium of $178,000.

Yardi’s student housing data set comprises over 2,000 universities and colleges, including the top 200 investment-grade universities across all major collegiate conferences. The Yardi 200 includes all Power 5 conferences as well as Carnegie R1 and R2 universities.