1

Multifamily Economic and Market Commentary

Fall 2023 Off-Campus Student Housing Update

Last year, beginning fall 2022, was the first full year for the student housing sector without any lingering restrictions

from the pandemic that had negatively impacted the sector in 2020 and 2021. As a result, the sector’s fundamentals

improved significantly. Now that the fall 2023 school year has started, that strength in demand has remained firmly in

place,with fundamentals remaining stable.

Still, there are challenges facing student housing. Elevated interest rates and higherlevels of inflation have contributed

to making both financing and construction costlier than before. Perhaps more importantly, the sector is also facing

ongoing enrollment constraints that could worsen as the cost of college tuition increases, and the pool of potential

students continuesto decrease due to a less-populous generation of college-age students.

A NewStandard for NewSupply

The amount ofnewoff-campus student housing being added to the existing inventory has remained below 2016 levels,

as seen in the chart above. For the third consecutive school year, new supply has been under 40,000 new beds

delivered. For the semester ending fall 2023, there were approximately 36,000 new beds delivered. Furthermore, both

fall 2024 and fall 2025 are expected to have approximately35,000 and 18,000 newbeds delivered,respectively.

Indeed, the off-campus student housing sector had been oversupplied for quite some time. Between 2013 and 2016,

there were approximately 241,000 beds delivered, and since then the number of beds delivered annually has been

steadily decreasing. Many off-campus student housing developers realized that declining college and university

enrollments were resulting in a softening of demand and, therefore, began curtailing the number ofnew development

projects a few years ago. Additionally, due to a combination of overall higher building material prices, higher wages, 

and ongoing construction labor constraints, many student housing developers have been narrowing their pipelines to

focus on more timely projects that will deliverin the nearterm.

Furthermore, because interest rates have been elevated over the past several months, financing has become both

more stringent and more expensive than previous years, keeping new supply in check. As a result, we expect that the

new baseline for student housing supply will be closer to the levels of fall 2022 and fall 2023’s expected supply, rather

than the amount delivered between 2014 and 2018.

Source: RealPage Inc.

*Indicates supply underway as of October 22, 2023

Student Housing New Supply Deliveries by Beds 2014-2025*

 -

 10,000

 20,000

 30,000

 40,000

 50,000

 60,000

 70,000

November 2023
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Multifamily Economic and Market Commentary

Fundamentals Still Performing Above Historical Averages 

For the last two school years beginning in the fall semester, student housing performance in terms of pre-leasing and 

occupancy rate metrics has continued to improve. The newest school year, fall 2023, has seen these metrics still above 

historical averages, but slightly below the fall 2022 school year’s record-breaking performance.

According to student housing data from RealPage, Inc., pre-leasing for the fall 2023 school year as of August 2023 was 

approximately 94%, a slight decline from fall 2022’s pre-leasing rate of approximately 95.1%, which was the highest 

amount on record at the time. Interestingly, pre-leasing metrics for fall 2023 are also outperforming metrics that were 

achieved during fall 2019, which was pre-pandemic. 

Occupancy rates also slipped slightly this school year. As of September 2023, the occupancy rate for off-campus beds 

tracked by RealPage was approximately 95%, compared to 96.5% in September 2022. There still appears to be ample 

demand for off-campus student housing properties; however, we believe that some of this demand is beginning to stabilize 

and will start to slow over the next few years. This is due to a myriad of factors, including the college student-age 

population size getting smaller, a slowdown in property transaction activity, and the rising cost of higher education, both 

in terms of tuition and school loan financing costs. 

Additionally, due to the above-average rates of occupancy and pre-leasing occurring earlier in the school year, effective 

rent growth is at its highest level on record. For the period ending fall 2023, rent growth at off-campus student housing 

properties tracked by RealPage Inc. ended the year at 9.3%. The level of rents is nearly double the amount of rent growth 

achieved during last year’s then-record high amount of 4.8% in fall 2022. However, it is unsustainable for rent levels to stay 

at these elevated levels. Therefore, for the foreseeable future, we expect rent growth will stabilize at a slightly lower level 

even as the amount of supply continues to moderate. 

Off-Campus Student Housing Fundamental Performance Since Fall 2019

Source: RealPage Inc.

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

80.0%

82.0%

84.0%

86.0%

88.0%

90.0%

92.0%

94.0%

96.0%

98.0%

Fall 2019 Fall 2020 Fall 2021 Fall 2022 Fall 2023

Pre-Lease Occupancy Rent Growth
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Multifamily Economic and Market Commentary

Enrollment Better but Still Contracting

According to the National Student Clearinghouse Research Center, as of spring 2023, total undergraduate enrollment 

declined by 0.5%. Although the number remains negative, this is the smallest rate of contraction in quite some time 

and an improvement compared to spring 2022, when undergraduate enrollments declined by 3.1%. While this is a 

much smaller decrease than in years past, it is uncertain whether this is the beginning of a new trend or if it is a shortterm anomaly. 

Currently, economic uncertainty – not only domestically but globally – is more pronounced than in years prior. In the 

past, growing shares of students enrolled in higher education to broaden their future employment prospects, but that 

assumption might not be valid going forward. Even with the smaller decline in annual enrollments, there are still some 

factors working against a potentially larger applicant pool, including rising tuition costs, fewer high school graduates 

deciding to attend college, and most especially, the less populous Gen-Z aged cohort compared to the sizeable 

Millennial one. 

According to Census Bureau data, the age of the high schoolattending cohort, aged 15-19-years-old, is expected to decline 

by nearly two million people over the next 30 years. As of 2023, 

there are approximately 21.8 million people in the 15–19-yearold cohort and by 2052 that number is expected to drop to 

nearly 19.7 million. 

Although a decline of two million may not seem like much 

relative to the population of the United States, a smaller 

potential applicant pool is expected to contribute to a decline in 

overall student housing demand, exacerbating already 

contracting enrollment patterns at higher learning institutions 

post high school. 

-12.00%

-10.00%

-8.00%

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

Public -4 Year Private NonProfit - 4 YearPrivate ForProfit - 4 Year*PABs Public - 2 Year Total (All)

Spring 2020 Spring 2021 Spring 2022 Spring 2023

Undergraduate Enrollment Changes Spring Semesters 2020-2023

Source: National Student Clearinghouse Research Center

*PABS - Primarily Associate Degree Granting 

Baccalaureate Decreasing High School-Aged Population 

Expected to Impact Student Housing 

Demand Longer Term

18

18.5

19

19.5

20

20.5

21

21.5

22

22.5

20042007201020132016201920222025202820312034203720402043204620492052

Population

(# Millions)

U.S. Population of 15–19-Year-Olds 

2004-2052

Source: U.S. Census Bureau
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Multifamily Economic and Market Commentary

Supply Leaders Then and Now

Since the off-campus student housing development cycle took of in the early 2010s, there has been some 

consistency among certain universities regarding new annual supply. When development began to increase, 

most of the schools receiving this new annual supply were located in the South, specifically Texas and Florida. 

The main reasons being that it was much cheaper and there were fewer roadblocks to constructing new 

developments in those states. From 2010 to 2019, among the top 15 recipients of new annual supply, six of the 

universities were in either Florida or Texas and 12 of the 15 schools were located elsewhere in the southern 

region of the U.S. 

However, in the 2020s, the usual suspects regarding annual supply are much different from the previous cycle. 

Since many of the southern universities, specifically the schools located in Florida and Texas, have since 

become oversupplied, developers have shifted course and started to construct elsewhere. In fact, the only 

schools that were part of the previous cycle and remain in this current development cycle are the University of 

Texas-Austin and the University of Florida. With annual supply continuing to moderate each new school year, it 

will be interesting to see which schools end the current cycle as the supply leaders. For now, The Georgia 

Institute of Technology (Georgia Tech) is the top school in annual supply.

University Rank University Rank

Texas A&M 1 Georgia Tech 1

Florida State 2 Washington 2

UT- Austin 3 Indiana 3

Texas State 4 Maryland 4

Baylor 5 Florida 5

Illinois 6 Nevada - Reno 6

Florida 7 UT - Austin 7

Alabama 8 Central Florida 8

South Carolina 9 Wisconsin - Madison 9

Minnesota 10 Georgia 10

Mississippi State 11 Northern Arizona 11

Arizona State 12 Clemson 12

Iowa 13 Penn State 13

Arkansas 14 Virginia Tech 14

Tennessee 15 Florida International 15

2010s Development Cycle Leaders 2020s Development Cycle Leaders

Source: RealPage Inc.

Moderation is Good for Fundamental Performance

Even with the continued improved performance of student housing fundamentals, there are still 

headwinds facing the sector. With a declining college student age population expected in the near term, 

coupled with higher education costs, a decline in new supply will likely help stabilize the sector over the 

long term. In the interim, however, we expect the student housing sector to remain stable, as moderating 

supply will continue to help keep demand fundamentals in place. We also expect the current lending 

environment, with elevated financing and project costs, to keep the sector from becoming oversupplied, 

helping keep demand and supply in balance over the short term.
Multifamily Economic and Market Commentary

5

Francisco Nicco-Annan

Multifamily Economics and Strategic Research – Economics – Advisor 

Multifamily Economics and Research

October 2023

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