December 2023 Pre-Lease Rate Tops 40%

As expected, the Fall 2024 pre-lease rate surpassed the 40% mark in the final month of 2023. As of December, 41.2% of beds at the core 175 universities tracked by RealPage have been claimed for the Fall 2024 academic year. That milestone was largely predicted as the first three months of the pre-lease season – October, November and December – generally mark the strongest month-over-month gains before leveling off to a slower and steadier pace after the new year.

December 2023’s reading registers just 10 basis points (bps) above December 2022’s reading of 40.1% of beds pre-leased, according to data from RealPage Market Analytics. That is perhaps a further indication that while student housing performance is still at or near record high performance, the pace of outperformance has slowed. The first three months of the Fall 2023 pre-lease season marked very strong leasing momentum – the strongest on record by most measurements – but then a notable leveling out occurred after January.

RealPage expected that trend to continue again in Fall 2024, even if this year’s leasing momentum had already topped last year’s high performance.

Across distance from campus, student housing product is tightly clustered in terms of pre-lease performance. Properties within a half mile to one mile of campus were the relative leaders in December with 41.6% of beds leased, but that was closely followed by a 41.3% reading at properties within a half mile of campus. Properties more than one mile from campus were 40.3% leased as of December.

While it’s still too early to point to true pre-lease laggards, the schools with the poorest pre-leasing through December tended to be satellite schools (such as within the University of California system) or commuter schools (such as University of Texas at Dallas). Both of those types of schools generally experience the bulk of leasing activity in the spring semester.

Meanwhile, rent growth continues to moderate from all-time highs to stand still above average. As of December, annual effective rents were growing 6.7% across the core 175 universities tracked by RealPage. That means rent growth, while still high, has come down each month so far of the Fall 2024 pre-lease season. Across distances, rents were growing at the highest rate at properties more than one mile from campus (8.9%), while properties between a half mile and one mile of campus were also growing rents above average (7.2%). Only properties within a half mile of campus – which consistently have the highest prices across the price spectrum – were growing rents at the lowest rate of 6.2% year-over-year.