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Multifamily Market Commentary – October 2017

Fall 2017 Student Housing Market Update

For the third consecutive school year, the supply delivered to the off-campus student housing market remains subdued 

compared to just a few years earlier. Supply in the student housing sector is defined by the number of beds since rent is 

charged on a per bed basis. During the school years of 2013 and 2014, the student housing sector had approximately 123,000 

new beds delivered. New deliveries slowed down immensely in 2015 and have moderated for the third consecutive year. 

Since 2015, approximately 144,000 beds have delivered, compared to the 123,000 beds delivered in 2013 and 2014. 

According to student housing data from multifamily research firm Axiometrics, a RealPage company, approximately 45,500 

beds will be delivered nationwide in the 2017-2018 school year. The plateauing of student housing supply is expected to 

continue next year in the 2018-2019 school year, with just 45,200 beds in the pipeline. 

A Slowdown in Deliveries 

During the 2015 and 2016 school years approximately 48,000 new beds were delivered each year, respectively. The amount 

of beds delivered in 2015 and 2016 was a far cry from the 62,000 beds delivered in 2014. Approximately 45,500 beds are 

expected to be delivered for the 2017-2018 school year. Of this number, approximately 37,500 beds have been completed 

and an additional 8,000 beds are still under construction and scheduled to deliver before the end of the school year.

It appears that new student housing deliveries in 2018 will remain stable for the fourth consecutive year in a row. For the 

2018-2019 school year, there are approximately 45,200 beds in the pipeline, which is just 300 fewer than the expected 

supply for the 2017-2018 school year. After a few years of elevated student housing deliveries, it appears that sub-50,000

bed deliveries are the new normal. 

Source: Axiometrics, a RealPage Company

Off-Campus Student Housing Beds – Delivered, Underway, and Planned

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Delivered Underway Planned
© 2017 Fannie Mae. Trademarks of Fannie Mae. 10.16.2017 2 of 4

Fall 2017 Fundamentals – Some Winners but Also Some Losers

The new school year brings new updates on the fundamentals of the student housing sector. According to Axiometrics, 

approximately 73 universities received new supply for the fall 2017 school year. Furthermore, of the 73 universities that 

received new supply during that time, only 23 of those universities are expecting additional supply in fall 2018. 

In regards to effective rent growth, both the University of Nevada-Reno and Bowling Green State University achieved the 

highest year-over-year rent growth rates at 8.2 percent and 7.8 percent, respectively. However, of the two, only the 

University of Nevada-Reno had a new supply of 530 beds for the fall 2017 school year. The occupancy rates at these 

universities were also close to full at approximately 99 percent and 98.7 percent, respectively. The limited amount of supply 

delivered to these universities allowed the schools to work through and moderate their supply from the previous school 

years.

However, not all of the universities enjoyed positive fundamentals. Both Texas A&M University and Texas Tech University 

are among the universities that receive an abundant amount of supply annually, according to data from Axiometrics. For 

the fall 2017 school year, approximately 6,070 beds were delivered to these universities, which accounted for approximately 

13.4 percent of all new supply delivered. The high amounts of supply delivered explains why the schools are experiencing a 

softening of their fundamentals. The occupancy rates at Texas A&M University and Texas Tech are approximately 84.3

percent and 84.1 percent, respectively. As a result of the copious amounts of supply and the low occupancy rates, rent growth 

is contracting at -4.8 percent and -5.5 percent, respectively. 

Some of the nation’s universities with the highest and lowest effective rent growth rates can be seen in the table below. 

Fall 2017 Off-Campus Student Housing Fundamentals – Select Universities

Source: Axiometrics, a Realpage Company
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Hurricane Harvey’s Impact

The arrival of the new 2017-2018 school year also coincided with the arrival of Hurricane Harvey. The state of Texas is a 

primary location for the student housing sector, and early indications are that the hurricane did not devastate the student 

housing sector there. According to preliminary information from Axiometrics, it appears that Hurricane Harvey did not 

cause significant damage to the state’s student housing properties. However, Hurricane Harvey did inconvenience move-in 

dates for students at Texas A&M University-Corpus Christi, and there was some minor flooding at the University of Houston. 

Performance of Fannie Mae’s Student Housing Loans 

Even though student housing represents a small portion of Fannie Mae’s multifamily loans, the sector has been performing 

quite well for some time. In 2014, student housing accounted for just 3.0 percent of Fannie Mae’s total multifamily 

acquisitions. However, as of second quarter 2017, that percentage has tripled and student housing acquisitions accounted

for 9.0 percent of its multifamily acquisitions. 

During first quarter 2014, Fannie Mae’s student housing acquisition volumes accounted for approximately $164 million. 

Three years later, as of second quarter 2017, its student housing acquisition volumes were approximately $1.05 billion. Yearto-date as of June 2017, approximately $2.2 billion in student housing volume has been acquired on 93 loans. 

0

10

20

30

40

50

60

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

Loan Count

Acquistion UPB (M)

Acquistion UPB (M) Loan Count

Fannie Mae Student Housing Acquisition Volumes Since 2014

Source: Fannie Mae 
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The New Normal?

The moderating supply level of the nation’s student housing stock has led to improving fundamentals for most universities. 

There are some schools that are still working through a bit of oversupply leftover from 2013-2014, but overall fundamentals 

have improved. 

Developers have started reacting to market trends and have started prioritizing quality over quantity. The shift to 

moderation in the student housing sector is expected to continue to be a win-win situation for all parties involved: 

developers, schools, and students. Although it is still early, it looks as if the shift to moderate supply will be the on-going 

theme for student housing over the next few years. 

Francisco Nicco-Annan

Multifamily Economist

Multifamily Economics and Market Research

October 2017

Opinions, analyses, estimates, forecasts, and other views of Fannie Mae's Multifamily Economics and Market Research 

(MRG) group included in these materials should not be construed as indicating Fannie Mae's business prospects or 

expected results, are based on a number of assumptions, and are subject to change without notice. How this information 

affects Fannie Mae will depend on many factors. Although the MRG bases its opinions, analyses, estimates, forecasts, and 

other views on information it considers reliable, it does not guarantee that the information provided in these materials is 

accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these 

views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published 

by the MRG represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie 

Mae or its management.