Student Housing Off to a Hot Start in 2023

Record preleasing and rent growth is powering the market, Yardi Matrix data shows.

Image by Vladimir Vladimirov/

Image by Vladimir Vladimirov/

The student housing sector’s record-breaking performance in 2022 offered a head-start for the industry in the new year. Despite rising interest rates pushing down multifamily rents, student housing remains mostly unaffected, according to a recent Yardi Matrix report.

The slowing economy has taken its toll on student housing development, with the sector’s pipeline decreasing by 2.6 percent between December and January. Meanwhile, preleasing and annual rent growth in late 2022 reached all-time highs at Yardi 200 institutions.

Three months into the fall 2023 preleasing period, beds at Yardi 200 universities were already 48 percent leased for the upcoming school year—the highest rate for any December on record. Roughly one third of institutions had a preleasing rate of at least 50 percent that month, while five universities were more than 90 percent preleased for the next school year.

Despite rent growth showings signs of cooling back in September 2022, numbers have been on the up and up. Annual rent growth at Yardi 200 universities hit 4.7 percent in December 2022—a record for that month. At that point in time, the average rent per bedroom reached $800, up 0.3 percent from November. Purdue University registered the largest annual rent growth in December, reaching 22.6 percent, fueled by a whopping 91.1 percent preleasing rate.

New supply pipeline shrinks

In the beginning of 2023, roughly 124,000 beds at Yardi 200 universities were in various stages of development, with 50,000 bedrooms being under construction. Even though the pipeline is still robust, it has decreased by 3,000 beds from the previous month.

Construction starts are expected to continue to slow in the coming year. Some 23,000 new bedrooms came online at Yardi 200 in the past 12 months. The University of Texas at Austin remains the school with the most bedrooms in the making, with six properties comprising a total of 5,000 beds under construction.

Last year ended with $5 billion in student housing transactions, nearing its peak in 2021. The average sales price per bed reached nearly $76,500, also slightly under the previous year’s average.

Head over to Yardi Matrix to read the full report.

You May Also Like