Still Historically Strong, Student Housing Pre-Leasing and Rent Growth Fall Below Year-Ago Records

While still healthy and strong by pre-pandemic standards, the pre-lease momentum for Fall 2024 has fallen below concurrent rates from the previous two years.

As of May, 78.6% of beds at the core 175 universities tracked by RealPage have been claimed for Fall 2024, compared to a rate of 80.3% one year ago, according to data from RealPage Market Analytics. May’s pre-lease rate also falls below the May 2022 pre-lease rate for Fall 2023 of 79.5%.

May also marks the final month in the pre-lease season in which students generally reside on or around campus. Pre-lease momentum generally slows in the summer months when students leave campus. The next three months of the pre-lease season could see approximately a 5% jump in pre-lease momentum month-over-month, if the last two summers are any indication.

Across distances from campus, properties farthest from campus reported the tightest pre-lease occupancy as of May at just below 80%. Properties within a half mile of campus (78.5%) approximately matched the RealPage 175 average, while properties within a half mile to one mile of campus garnered the lowest (but still historically strong) pre-lease occupancy of 78% as of May.

About 15 schools among the RealPage 175 reported pre-lease occupancy above 90% as of May, including Ole Miss, University of Arkansas, Tennessee, Virginia Tech, Purdue and Auburn, which generally lease up more quickly than average.

Meanwhile, several of those same schools reported ultra-strong annual effective rent growth in May. The University of Tennessee continued to lead the nation in student housing rent growth at over 25% year-over-year in May, followed by growth above 10% at about 10 other campuses, including Ole Miss, University of Kentucky, Purdue, College of Charleston and University of Arizona.

Across the RealPage 175, annual effective rent growth softened to 4.8% in May, the lowest rate seen so far this pre-lease season. Properties more than one mile from campus continued to report the strongest rent growth at over 6% as of May, followed by slightly softer readings at properties closer to campus.