Analyzing Trends: Yardi Matrix's US Student Housing Market Report for March 2024

The US National Student Housing Report for March 2024, compiled by Yardi Matrix, offers a comprehensive analysis of the current state and future projections of the student housing market. This report delves into various aspects of the student housing sector, providing valuable insights into leasing trends, rental rates, occupancy levels, and regional market dynamics. The report indicates that the leasing season for 2024-2025 is similar to that of the previous year, suggesting a level of continuity and stability in the market. Additionally, the report provides forecasts and projections for the student housing market beyond March 2024. These projections could cover rental rate growth, occupancy trends, and other key metrics, assisting stakeholders in planning and decision-making.
Through a combination of quantitative and qualitative analysis, the March 2024 edition of the National Student Housing Report illuminates key market factors, contributing to a deeper understanding of the sector's opportunities and challenges. Below are some key findings from the March 2024 edition.

1. US Student housing preleasing reached 61.5% in February 2024, 450 basis points higher than in February 2023. The spread in preleasing compared to last year has begun to decrease as it includes verified data from a larger number of properties. Yardi Matrix forecasts a significant increase in the delivery of new beds in 2024, with 46,285 new beds expected to be delivered, up from 35,610 beds in 2023.

2. According to the Yardi Matrix Report, enrollment data for 2023 was collected from 178 schools. After a slight dip in 2022, enrollment rebounded in 2023, with total enrollment increasing by 0.8% compared to -0.3% in 2022. Fifty universities experienced growth of more than 2% in the fall of 2023, while 19 schools saw growth of more than 4%, including several schools with the highest preleasing growth and rent growth.

3. In February 2024, the average rent per bed was $883, a 5.2% increase year over year. Rents have been consistently growing throughout the 2024-2025 leasing season. However, Y-O-Y growth slowed down from 6.7% in October and  7.3% in February 2023. US Student housing has outpaced nearly all other asset classes as demand has remained strong and supply has remained relatively stable.
According to Matrix Analyst, “Rent growth slowed each month of the leasing season but is well-above the average of 3.5% going back to the beginning of 2018, and well ahead of the general multifamily market, as student housing has proven to have much different demand drivers."

4. In February 2024, 32 universities saw double-digit rent increases, including most of the markets leading the nation in preleasing. In contrast, 26 markets are experiencing rent decreases of 1.0% or less, including many that did not reach 90% for fall 2023. The top ten preleasing markets include. Tennessee–Knoxville, Ole Miss, Clemson, Purdue, Texas State, Kentucky, NC State. The average preleasing rate was 82.6%, and rent growth was 14.8%.

5. Despite the uncertainty in capital markets, the fundamentals of the US student housing market remain strong. The student housing investment market in the United States has passed $10 billion and is expected to hit $14 billion in 2027. The student housing market experienced a drop in transaction volume in the year 2023. Still, experts say that US student housing is recession-proof and resilient in the midst of current challenges, and they anticipate an upturn in 2024.

6. US student housing investment saw a significant decrease in real estate sales in 2023. Only 78 properties were sold, which is low in comparison to an average of 205 properties sold in 2021 and  2022. Moreover, the average price per bed decreased about 5% year over year to $74,000. In the first two months of 2024, 9 properties have been sold, which is roughly in line with the sales rate in the first quarter of 2023. This suggests that 2024 may be another low-volume year for student housing investment sales.

These key findings provide a comprehensive overview of the trends and challenges in the US student housing sector in March 2024. They highlight aspects such as supply growth, rental rates, student accommodation statistics in the US, and concerns regarding affordability and planning applications.