Student housing rent growth fell to 2.5% in March, down from 3.4% the prior month. This represents the largest national month-over-month decline in the last six years, according to Yardi Matrix’s National Student Housing Report. The average rent per bed was $918, which is still a record high for the sector as rents inched up $1.
However, “the deceleration in growth was notable, as the sector expects rent growth to come down from an average of 6% during the 2023-2024 leasing season and an average of 3.7% since January 2018,” noted the report.
Rent growth in March was not even across the board, with 17 universities, mostly smaller student housing markets, experiencing over 10% growth, while 69 schools, including larger markets, saw rent declines.
Preleasing at the Yardi 200 schools reached 67.1% last month, lagging the recorded level of 67.7% in 2024’s April report. This signifies an overall slowdown in preleasing from last year. In addition, Yardi Matrix said March’s percentage will likely be revised downward as more data becomes available.
According to the Yardi Matrix data, preleasing topped 80% in March at 34 universities, including 25 schools with four or more student housing properties. The top-performing large markets were Virginia Tech at 93% preleased; Alabama at 92.8%, Kentucky at 91.3%; and Wisconsin at 90.3%.
On the other end, 41 markets were less than 50% preleased, including 22 with four or more student housing properties. Many of these universities are lagging 2024’s pace, including Utah Valley, 25.3% preleased and 19.9% behind; UNC-Greensboro, 32.4% preleased and 14.7% behind; and the University of Houston, 32.8% preleased and 12.6% behind.
New supply has been dropping, with 35,703 off-campus, purpose-built student housing beds coming online last year, down from 44,746 in 2023.Yardi Matrix said it expects supply to continue to drop—32,100 beds this year and 33,995 beds in 2026.
However, fall 2024 enrollment data shows growth for 183 of the Yardi 200, with an average of 1.7% year over year compared with 1.2% growth in fall 2023 and -0.5% in fall 2022.
“Enrollment growth has mainly benefited primary state schools, while tertiary state and private universities have seen the greatest declines,” noted the report. “Enrollment has been boosted by strong demographics but is threatened by political factors likely to cause declines in foreign student enrollment and graduate enrollment during the current presidential term.”
Sales volume started to pick up at the end of 2024 for student housing, with 28 properties transacting in the fourth quarter, bringing last year’s total to 129 dedicated student housing properties sold. This is 50 more than in 2023 and well above the pre-COVID average. The average price per bed, according to Yardi Matrix, was $101,000 in 2024, which was on par with the previous peak in 2020.
