Real Estate Trends Student Housing Market

National Student Housing Market Report – Q1 2023

National Student Housing Market Report Q1 2023
Image by Vladimir Vladimirov/

With record-breaking preleasing and rent growth at the end of 2022, student housing is off to a good start in the new year.

Report highlights:

  • Preleasing for the fall 2023 school year has set a new record for December, as 48% of bedrooms were already leased
  • Rent growth remained strong and reached 4.7% year-over-year as of December
  • A slowing economy is impacting new supply: the development pipeline at Yardi 200 universities decreased by more than 3,000 bedrooms from December to January

The market’s strong performance carries over into 2023

As of December, 48% of beds at Yardi 200 universities were leased, with one-third of institutions having at least a 50% preleasing rate, according to Yardi Matrix data. This represents a 16.3% increase since 2021’s record high, a new record for the market and paving the way for another best-performing year.

National Student Housing Market Report Q1 2023

Leasing was strong across schools of all sizes, with five universities achieving preleasing rates that exceeded 90% as of December, including the University of Wisconsin Madison, the University of Tennessee Knoxville and Purdue University. That same month, Johns Hopkins University (66.7%), Texas Christian University (60.1%) and University of Arkansas (54.2%) registered the biggest jumps in year-over-year percentage of beds preleased.

December annual rent growth breaks record

Despite rent growth giving signs of cooling in September 2022, numbers have risen since. In the last month of 2022, annual rent growth at Yardi 200 universities reached 4.7%—the highest on record for December. The average rent per bed reached $800 in the last month of 2022, marking a $2 increase since the previous month.

Purdue University registered the largest annual rent growth in December, reaching 22.6%, fueled by a strong 91.1% preleasing rate. Only a few schools saw negative annual rent movement in the last month of 2022, including Bowling Green State University.

New supply pipeline shrinks

Rising interest rates are impacting the student housing market. In January 2023, roughly 124,000 beds were in various stages of development across Yardi 200 universities. The pipeline shrunk by 3,000 bedrooms since December, a 2.6% decrease.

National Student Housing Market Report Q1 2023

Maintaining its leading position as most beds under construction, The University of Texas at Austin had six properties and 5,000 beds in the making at the beginning of 2023. The school’s student housing fundamentals are strong, with 59.6% of beds preleased in December and an annual rent growth of 5.5%.

In January, 50,000 bedrooms were in the making at Yardi 200 schools and experts are predicting construction starts to slow in the months to come. Deliveries increased slightly, with 23,000 bedrooms completed in the past year.

For investors that are looking to deploy capital, the student housing sector remains a solid option. In 2022, student housing sales totaled $5 billion—slightly lower than in 2021. The average sales price per bed also decreased from the previous year, reaching $76,500.

Read the full Matrix Student Housing Report-Q1 2023.

About the author

Beata Lorincz

With a background in architecture, Beata Lorincz has been an associate editor with Commercial Property Executive and Multi-Housing News since 2017. Her current work centers around architecture and design, the student housing sector and data-driven updates on the office market.

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