As the new school year approaches, student housing pre-leasing is trending ahead of the past two years at 85.3%, a 160 basis point increase from June 2024 and a 20 bps increase from June 2023, according to the Yardi Matrix July national student housing report. That is just below the June 2022 level of 86.3%, which came during a year that occupancy peaked at 96.2%.
Fifty universities are already more than 90% pre-leased, and 10 universities are 100% pre-leased. Schools that have posted strong preleasing include the University of Mississippi, the University of Missouri, Western Carolina, Virginia Tech, Illinois State and James Madison.
Twenty schools were below 70% pre-leased, including the University of Texas at Arlington, Temple, Utah Valley, Sam Houston, and Minnesota, said Yardi Matrix.
Thirty-four markets were at least 10% ahead of last year’s pre-leasing performance, down from 40 markets in May. Meanwhile, 20 were 10% or more below last year’s pre-leasing performance, down from 24 last month.
Some large schools that have previously posted strong performance are now trailing, including Purdue, which is 9.7% below last year; North Texas at 6.4% behind; Arizona at 6.2% behind; Georgia Tech at 5.4% behind; Oklahoma at 5.1% behind; and Michigan at 5% behind.
Three universities have posted year-over-year pre-leasing gains of more than 20%. They are the University of Cincinnati, up 23.9%, SUNY at Albany, up 22.2% and UC Berkeley, up 21.8%.
Rent growth has slowed as operators focus on filling beds, with the sharpest reductions happening in markets facing new supply. Average advertised rates have declined over the past three months to $909 in June. That is a 1.3% year-over-year increase, which is the weakest performance since April 2021 and extends a trend of deceleration that started in late 2023.
Rents at Ole Miss surged the most in June by 21.1%, the highest among all markets, driven by a 25% increase in enrollment since 2021. Despite flat enrollment, Mizzou posted 10.9% rent growth, aided by eight years without any new supply. Rents in Kansas also increased with no new supply, rising 10.2%.
Enrollment is expected to increase this year, but the sector still faces several challenges, including federal budget cuts for higher education, reductions in student loan programs and an expected decline in international student enrollment. Private institutions are likely to be most impacted, according to the report.
Sales volume is down in the sector, with 50 properties trading hands so far this year. However, the number of beds sold is higher than in the past two years, and the average price per bed has increased to nearly $94,000, compared with the 2020-2024 median of $73,500. Yardi Matrix said this increase is likely directly related to a 23% increase in average rent per bed since January 2020.
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