The student housing sector is facing some near-term uncertainty driven by tariffs, ongoing immigration and university funding changes, and recession worries. However, long-term fundamentals remain strong, including stable enrollment and strong preleasing, according to Yardi Matrix’s May 2025 national student housing report.
There has been some softness emerging in high-end assets, particularly tier 2 and 3 schools and in major MSAs where multifamily has been weaker, the report said.
Pre-leasing for the 200 schools Yardi studies averaged 73.2% in April, a 140 basis point jump from 2024 but even with April 2023.
“Despite the solid pre-leasing trend this year, operators are reporting a more challenging lease-up season, and they have had to drop rates to fill beds,” said Yardi.
Twenty-one universities reported pre-leasing of greater than 90% as of April, including Alabama, Mizzou, Virginia Tech, James Madison, Wisconsin-Madison and Kentucky. Meanwhile, 21 schools were less than 50% pre-leased, mostly smaller secondary/tertiary or private schools
Advertised rental rates were $917 per bed, with rents dropping 2% year-over-year from 2.6% in March and an average of 6.4% over the past two leasing seasons, said Yardi. Rent growth fell to 2% year-over-year and has slowed every month of the fall 2025 leasing season.
“Operators have highlighted this trend as a sign of weaker performance, as a few of the largest student housing markets are competing with weaker multifamily markets with declining rents or have significant new supply on the way,” said the report.
Despite the slowdown, there is still a wide range of rent growth by market, said Yardi. Seventeen markets saw 10% gains or more year-over-year in April, while 69 markets saw lower levels versus last year.
Enrollment for fall 2024 averaged 1.8% ahead of 1.1% for fall 2023 but down 0.6% from fall 2022 enrollment. The firm revised its student housing supply forecast down and now projects 28,454 beds to be delivered for fall 2025, 27,752 in fall 2026 and 25,230 beds in fall 2027. That’s all down from 44,746 beds delivered in 2023, with slower development activity attributed to tighter financing conditions and increasing construction costs.
The student housing transaction market remained active at the beginning of 2025, with 27 properties sold through the end of April, which is similar to 2023 and 2024. Sales price per bed surged last year with two portfolio sales going for more than $100,000 per bed. The average per-bed sales price is $74,205 so far this year. Yardi said sales typically accelerate later in the year as properties complete lease up.
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