Strong Pre-Leasing Early in Season Points to Mild Second Half for Student Housing

Student housing momentum in the first half of the pre-lease season has gotten considerably stronger in the last couple years. While the second half of the season is expected to be more mild, look for the market to end Fall 2024 in solid shape.

If we divide student housing pre-lease data in half, drawing the line between February and March data, it’s easy to see that student housing momentum in the first half of the pre-lease season has gotten notably stronger in recent years. While pre-lease velocity has eased a bit year-over-year, Fall 2024 remains the second-strongest reading on record at 54.9%, according to data from RealPage Market Analytics.

With the first half of Fall 2024 looking so similar to Fall 2023 (55.8%), it’s not hard to imagine the second half of Fall 2024 also comparing to last year’s performance. And while momentum was comparatively mild in Fall 2023’s second half (38.2%), if the student housing sector displays similar performance in Fall 2024’s second half, the final pre-lease rate would still be respectable at 93.1%, matching the market’s decade average.

Student housing rent growth in the past few years has also acted out of character. In general, price setting tends to be harder in the second half of the pre-lease season. But in 2021 through 2023, while the typical moderation did occur, the second half of the season still saw rent growth of about 1% to 2%. Prior to 2021, rent cuts were the norm in the second half of the season, averaging a slight decline of 0.4%.

Moving forward, look for moderation to continue, but for rent growth to at least remain above historically normal levels into the first half of the Fall 2025 leasing season.

For more information on the state of student housing market, including forecasts, watch the webcast Market Intelligence: Q1 Student Housing Update.