Student Housing Pre-Lease Growth is Slowing Down

The student housing market is seeing a slowdown in pre-lease occupancy rates and rents, impacting investments in the sector.
  • Fall 2024 student housing pre-leasing dipped below previous years, with 78.6% of beds already claimed.
  • Notably, dorms farther from campus are enjoying higher pre-lease occupancy rates. School performance also plays a role in keeping rooms full.
  • Overall rent growth softened to 4.8% across the RealPage 175 index, revealing a wide range in growth rates across institutions.
Key Takeaways

According to RealPage, student housing pre-leasing rates slipped to a three-year low in May but remained above 2021 levels. Some universities are also doing much better than others.

Missing Momentum

While still robust compared to pre-pandemic semesters, Fall 2024 pre-leasing for student housing has dipped to a 3-year low. Approximately 78.6% of beds at key universities have been claimed.

The decline in pre-leasing may be due to students leaving campus during the summer months. However, occupancy rates are also expected to go up by at least 5% during summertime due to students returning for interim classes.

Distance Matters

How close dorms are to campus is directly correlated with higher pre-lease occupancy rates, but not in the way you might expect. 

Properties more than 1 mile from campus led in pre-lease occupancy  rates and rent growth, surpassing 6%. Meanwhile, dorms within a 0.5 to 1-mile radius of campus showed lower (but still historically strong) occupancy levels.

Some institutions—like Ole Miss, the University of Arkansas, and Purdue—boasted pre-lease occupancy rates above 90%, revealing a wide range of leasing speeds across institutions within the RealPage 175.

But despite some universities achieving exceptional annual rent growth rates, YoY effective rent change across RealPage 175 properties was 4.8% in May.

Why It Matters

Who said anything about an enrollment cliff? RealPage’s insights into current student housing pre-leasing and rent growth trends suggest a positive shift in demand and pricing. The upcoming summer months should result in even better numbers, too.

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