Preleasing and rent growth for student housing for the 2024-25 school year continue to break records, according to the latest Yardi Matrix National Student Housing Report.
In January, preleasing reached 54.5%, a 710-basis-point increase year over year. In addition, 22 markets were at least 75% preleased, while four had already surpassed the 90% mark.
Nineteen markets, including nine with four or more properties, were at least 20% ahead of preleasing compared with the same time in 2023. The University of Mississippi is significantly ahead of last year, already 98% preleased in January.
Only 34 schools, out of the 145 with data, were less than 30% preleased in January compared with 50 at the same time in 2023.
“Operators have started preleasing earlier each year, as demand has increased due to strong enrollment growth among both new freshmen and existing undergraduates and supply has failed to keep up,” noted Yardi Matrix.
Rents at Yardi 200 schools averaged $863 per bed, a record high, in January. However, year-over-year growth decelerated to 4.4%, down from 6.3% in January 2023 and 6.5% at the start of the leasing season. Rents are only up 0.1% from December.
In January, 24 markets saw double-digit rent growth, while 32 had growth of less than -0.5%. Rent decreases have been seen at schools with an influx of supply and/or below-average enrollment numbers.
“Rent growth patterns in student housing vary by market,” noted Yardi Matrix. “Some operators push rates hard at the beginning of the leasing season to test the market and ease rent growth later on to fill the remaining beds. Slowing rent growth also reflects the fact that increases were high a year ago.”
Yardi Matrix’s supply forecast anticipates over 46,000 new beds will deliver this year, which is a substantial jump from the 35,610 beds that were delivered last year. Over the next five years, it expects supply to drop below the long-term average of 36,322 beds per year dating back to 2010.
Looking back at 2023, according to Yardi Matrix, investment activity was down considerably. Only 76 properties were sold compared to an average of 205 in 2021 and 2022. The decreased activity also resulted in a lower price per bed—$75,410—last year compared with over $80,000 per bed in the previous five years.
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