April Pre-Lease Rate Runs Above Average, But Below All-Time High

With such strong leasing activity in the early months of the student housing pre-lease season, a slight softening was expected toward the end of the spring semester. As expected, April readings showed that, while still historically strong, student housing pre-lease rates lost a bit of momentum to stand below last year’s all-time high.

As of April, 72.3% of beds at the core 175 universities tracked by RealPage have been claimed for Fall 2024, compared to a rate of 73.7% one year ago, according to data from RealPage Market Analytics. The April 2024 rate still runs easily above pre-2023 rates, which hovered below 70%.

The 6.7% bump in pre-leasing from March clocks in at half or less of the jumps seen in the early months of the pre-lease season. As expected, this indicates that performance in the back half of the pre-lease season (from March to August) will be more modest – though still favorable – compared to the first half (from September to February).

Rent change in student housing product continued to soften from unsustainable highs recorded over the last couple years. Effective asking rents increased 5.1% year-over-year as of April, compared to annual growth of 5.8% recorded just one month ago in March.

Properties across all distances were tightly clustered around the total average occupancy of 97.2% as of April. Among distances from campus, properties more than one mile from campus reported the strongest rent growth at 6.5% in April. Year-over-year effective rent growth softened across all distances from March to April, though remained easily more than double the long-term norm for annual rent growth closer to 2%.

As of April, 35 schools with sufficient sample within the RealPage 175 reported both stronger pre-lease occupancy and higher effective rent growth than the national norm. Among those schools with outperforming rent growth and pre-lease rates are several flagship universities in southeastern states (such as University of Tennessee, Ole Miss, University of Kentucky, University of Georgia, Bama and University of Arkansas). As has been the case for several months, University of Tennessee and Ole Miss were the national leaders for student housing rent growth as of April, both reporting annual growth rates at or above 20%.