Rising enrollment has helped boost student housing leasing over the past couple of years, but several headwinds threaten future enrollment growth, according to Yardi Matrix’s June national student housing report.
The number of high school graduates likely peaked this year and is expected to gradually decline, the report said. In addition, higher-education funding, particularly for graduate research programs, is at risk due to policy changes, and the international student visa process is under greater scrutiny, which may limit the flow of non-U.S. students to U.S. universities, said the report. International students traditionally represent a significant share of off-campus housing, and both smaller private institutions and large public universities could be impacted by a decline in international students, the report said.
Student housing pre-leasing in May was trending above last year at 79.9%, a 1.5% increase from May 2024, according to Yardi. Thirty universities were more than 90% pre-leased and 17 were more than 95% pre-leased as of May. Seventeen schools remained less than 60% pre-leased as of May, mostly in smaller student housing markets, said the report. However, some larger student housing markets are lagging, including the University of Texas at Arlington, which was only 45.4% preleased in May, Houston, at 55.6% preleased, Temple at 59.9% preleased, and Sam Houston at 62.9% preleased.
Many schools that struggled to lease up last year have made a turnaround this year, including Cincinnati, which is 22.5% ahead of last year, UPenn/Drexel, which is 19.8% ahead of last year, UCBerkley, up 19.8% from last year, and Nevada-Reno, up 14.6% from last year.
Annual rent growth has been decelerating in recent months, with rent growth of 2.1% in May marking the lowest rate since July 2021. Average rent growth for the fall 2025 leasing season is currently 3.4%, which compares with 5.8% for fall 2024 and 7% for fall 2023, according to the report. This cooling trend mirrors a similar trend seen in conventional multifamily, said Yardi.
The average advertised rental rate per bed was down $1 from the record high of $919 set in March of this year. This is the second month in a row that rents have failed to grow on a month-over-month basis.
Solid performance in recent years has translated into a higher appetite for student housing acquisitions, the report said. The student housing investment market is on pace with last year, with 36 dedicated student housing properties sold so far this year at an average sales price per bed of $88,467. That is behind last year’s average per-bed sales price of $105,252. Yardi noted there have been no major portfolio trades, which usually push pricing higher.
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