Student Housing Market: Impact of Enrollment Shifts

The student housing market is evolving as enrollment patterns shift across the U.S., creating changes in demand, rental prices, and investment strategies. Here's what you need to know:

• Enrollment Growth: Undergraduate enrollment is expected to rise from 15.2 million (2023–2024) to 20.5 million by 2027. Graduate enrollment will reach 3.4 million by 2031.
• Regional Trends: The South and West are seeing enrollment increases, driving housing demand, while the Midwest and Northeast face declines.
• International Students: Over 1 million international students are boosting demand, with India now leading as the top source.
• Housing Shortages: Only 21.5% of undergraduates are housed on campus, leaving nearly 8 million students to find off-campus solutions.
• Market Challenges: Rising interest rates, slowed new construction, and a need for modern amenities and flexible leasing are reshaping the student housing landscape.

This dynamic market offers opportunities for developers and investors, particularly near flagship universities and in high-growth regions like the Sun Belt.

Student Housing: Thriving Market Trends and Investment Opportunities

Enrollment Trends Driving Housing Demand

The South and Southwest regions are seeing a surge in student housing demand. In Texas alone, demand is projected to grow by 12–15% annually through 2027. To meet this need, major universities are investing heavily in expansion projects. For instance, The University of Texas at San Antonio is working on a $1.2 billion downtown expansion slated for completion in 2025, while Texas A&M University’s "25 by 25" program aims to create 15,147 new beds at a cost of $2.5 billion. These initiatives have made areas like Greater Houston key hubs for student housing.

Meanwhile, states in the Desert and Mountain regions are grappling with rising rents and housing shortages due to enrollment spikes. In contrast, rural and less competitive markets are seeing a decline. Across North and South Carolina, growing enrollment at top universities is fueling housing demand. Similarly, in the Southwest, the University of New Mexico's "Lobo Village" has become a standout, reporting 98% occupancy and achieving an 18% reduction in operational costs.

"Power 4 markets, flagship public universities and the most highly regarded academic institutions continue to see a consolidation in both enrollment growth and demand for purpose-built student accommodation surrounding the schools."
– Ryan Lang, Newmark Vice Chairman & Head of Student Housing

The SEC remains the leader in student housing investments, while the Big Ten is catching up as large universities post record enrollment growth. These shifts are further shaped by trends in international student enrollment.

International Student Impact

International students play a significant role in shaping housing demand, especially in major metropolitan areas and university towns. In recent years, the number of international students in the U.S. exceeded one million, with a 14% enrollment increase recorded in 2022–2023. Research from 2020 to 2023 shows that for every 1% rise in the international student ratio, Fair Market Rent (FMR) Efficiency increases by about $14.39. This group has also contributed to a 1.3% rise in rents and a 2.5% increase in home prices, resulting in an average home equity gain of approximately $4,000.

In 2023/24, India overtook China as the top source of international students in the U.S., while countries like Nigeria, Bangladesh, Ghana, and Pakistan have seen notable growth. At the same time, demand from traditional markets such as China and South Korea has leveled off, reflecting shifts in student housing preferences and needs.

How Institutional Changes Affect Local Markets

Changes in university policies and educational models are reshaping local housing markets. The rise of online programs has reduced the demand for traditional on-campus housing. A large majority of undergraduates - 86% - prefer a hybrid learning model, taking one to four online courses per semester. Nearly all students (95%) want at least one online course in their schedule, while only 5% prefer fully on-campus classes. Additionally, 77% of chief online learning officers report that campus-based students are actively requesting online options.

Housing policies on campuses are also influencing local markets. For example, converting double-occupancy dorms into single-occupancy spaces can reduce on-campus housing density by 20% to 50%, pushing more students into private rentals.

To address these challenges, universities are increasingly partnering with private developers through public–private partnerships (P3). These collaborations allow for faster and more cost-effective construction of purpose-built student housing. James Wilhelm, Chief Development Officer at American Campus Communities, highlights the benefits:

"We can deliver purpose-built student housing on a faster schedule and at a lower cost than universities can, translating into more affordable housing options for student residents."

These trends are driving demand for flexible, short-term, and co-living housing solutions. At the same time, a growing emphasis on privacy - fueled by social anxiety and a desire for personal space - is shaping the design and amenities of student housing.

Market Response: Development, Investment, and Supply Changes

Developers and investors are rethinking their strategies as shifting enrollment patterns reshape the student housing market. While demand remains steady in key areas, new challenges are pushing the industry to adapt its approach to development, investment, and operations.

Student Housing Development Activity

Builders are becoming more selective, focusing on high-growth markets and flagship universities. For instance, the University of Tennessee and Florida State University are leading the way, with 3,371 and 2,887 beds under construction, respectively. This trend reflects a broader focus on Power 4 markets and top-tier institutions, aligning with robust enrollment growth in the Sun Belt and flagship university expansions.

Major players in the industry are making bold moves in prime locations. American Campus Communities, for example, added nearly 4,000 beds across six university markets in 2024. Core Spaces has multiple large-scale projects underway, including developments in Madison, WI; Tampa, FL; and Knoxville, TN, each exceeding 1,000 beds. Landmark Properties is also expanding, breaking ground on The Standard at Los Angeles (1,236 beds near USC) and announcing three additional projects totaling 3,580 beds. Meanwhile, Subtext has completed projects in Indiana and Wisconsin and secured six new developments.

However, new supply is slowing down. In 2024, only 35,703 off-campus, dedicated student housing beds were completed, a drop from 44,746 in 2023. Projections for 2025 and 2026 show further declines, with 32,100 and 33,995 beds expected, respectively. This marks a 6% decrease, bringing the annual supply below the 10-year average of 40,000 beds.

Developers are shifting their priorities to efficiency and practicality. Mitchell Korte, Executive Vice President of Development at Subtext, explains:

"We focus on designing our projects as efficiently as possible, eliminating unnecessary space and avoiding materials or features that don't add real value."

Dan Goldberg, President of Core Spaces, highlights a trend in amenity design:

"We're moving away from segmented amenity spaces and instead creating open spaces that can be used in a variety of ways throughout the day - grabbing coffee in the morning, studying in the afternoon and hanging out with friends in the evening."

Investment Challenges and Opportunities

The investment side of student housing is a mix of hurdles and openings. In 2024, transaction volume rebounded to $8.5 billion, a 43% increase from the previous year. This resurgence signals growing investor confidence, despite market uncertainties.

Christopher Epp, Managing Director of Walker & Dunlop Investment Sales, highlights the sector's appeal:

"In 2024, student housing transaction volume rebounded to $8.5 billion, a 43% year-over-year increase, as investors were drawn to the sector's strong fundamentals, including rising enrollment, resilient operations, and attractive yields."

Still, rising interest rates, market volatility, and regulatory challenges are affecting financing and projected returns. These hurdles are keeping new supply limited, indirectly benefiting existing property owners by reducing competition. Institutional investors, including foreign capital, are also increasing their market presence.

Student housing continues to outperform traditional multifamily housing in rent growth, with figures showing a 5.0% increase in 2023 and 4.3% in 2024. By contrast, multifamily housing saw just 2.5% growth in 2023, followed by a 0.3% decline in 2024.

Loan maturities will play a pivotal role in 2025, with $8–10 billion in multifamily and student housing loans set to mature. This could create opportunities for well-capitalized investors to acquire assets from overleveraged owners.

Public–private partnerships (P3s) are gaining traction as a way to offset high development costs. James Wilhelm, Chief Development Officer at American Campus Communities, notes:

"Universities of all sizes are continuing to seek out P3 developments as a cost-effective way to meet housing demand and reduce their exposure to development, operational and capital reinvestment risk."

The fragmented nature of the market also presents acquisition opportunities for REITs and larger operators. With some schools experiencing declining enrollment and others growing, the market reflects a "tale of two cities" scenario.

Occupancy Rates and Rent Growth

Strong demand has kept occupancy and rent growth steady, even amid financing challenges. Preleasing reached 94.5% across the industry, with 50 out of 200 institutions monitored by Yardi achieving 99% occupancy as of September.

Student housing rents continue to outpace traditional apartment markets, with the national average now over $1,000 per bed . In fact, 40% of universities report student housing rents higher than those of nearby multifamily housing. Typically, a 10% rise in local market rents leads to an 8% increase in student housing rents.

The Midwest is leading the way for rent growth in the 2025–2026 academic year, with average rents climbing by 7%. Southern markets also remain attractive for development, driven by strong enrollment growth in the Sun Belt.

That said, annual rent growth has slowed to 2.1% in some areas, the lowest since mid-2021. Alex Rippy, Vice President of Leasing and Systems at GMH Communities, comments:

"Students are really starting to slow down and make more executive decisions based on analysis of the product, value and what is really driving rents upward. Leasing still looks great; it's just a touch slower than last year."

Despite this, industry leaders remain optimistic. Jason Fort, Executive Vice President at Asset Living, emphasizes:

"When the student housing industry is raising rents and occupancies are strong - why are we worried because we're not getting 15 percent rent growth but we're getting 8 percent and our industry occupancies are super strong. The fundamentals have never been better. We're going to raise rents, but we're going to do it in tiers and we're still going to be successful. Students need a place to live, deliveries are down and enrollments are up in Power Four schools. There's never been a better time to be in student housing than right now."

With new construction slowing and demand holding steady, property owners - especially those near flagship universities - continue to enjoy significant pricing power.

Changing Student Preferences and Housing Impact

Shifting student preferences, influenced by changing lifestyles and financial pressures, are reshaping how student housing is designed and managed. Today’s students prioritize functionality, privacy, and modern technology, pushing developers and property managers to rethink everything from layouts to amenities.

Demand for Modern Amenities and Technology

Students now value practical features over luxury perks. Essentials like Wi-Fi, laundry facilities, utilities, and parking are at the top of their list, reflecting the financial challenges many face. For instance, 34% of undergraduates and 38% of graduate students earn less than $20,000 annually.

Privacy has become a top priority, leading to significant changes in housing design. Since 2010, only 5% of newly built student housing includes double-occupancy units. Universities are also converting on-campus housing to single-occupancy layouts, with 63% of U.S. students opting for private rooms. Equal bed-to-bath ratios are now the norm.

Technology is another must-have. Students expect smart features like digital keys, voice-activated devices, contactless payments, and high-speed internet. These tools not only simplify daily life but also improve operational efficiency for property managers.

Sustainability is another driving force in housing preferences. A staggering 87% of students believe accommodations should be more eco-friendly, and 83% of Gen Z students are concerned about environmental issues. Developers are responding by incorporating energy-efficient lighting, green roofs, and sustainable materials into new projects. These features are becoming key selling points as students increasingly seek housing that aligns with their values.

As student housing evolves to meet these demands, leasing structures are also adapting to fit students’ financial and scheduling needs.

Flexible Leasing and Co-Living Options

Co-living has emerged as a popular, budget-friendly solution for students. According to a CBRE report, the U.S. co-living market is projected to hit a $100 billion valuation by 2025. Currently, 15% of U.S. students live in shared co-living accommodations, a figure expected to grow to 25% by 2025.

Co-living offers lower rents - ranging from $7,200 to $10,800 annually - and flexible lease terms that align with academic and work schedules. These arrangements not only reduce individual costs but also generate 20% more rental income for property owners compared to traditional student housing.

The rise of remote work and the gig economy has further fueled demand for flexible housing. Co-living spaces cater to these needs with short-term leases and amenities like high-speed internet and co-working areas. National student housing occupancy rates reflect this trend, peaking at 94.5% for the 2024-2025 academic year, with over 50 campuses exceeding 99% occupancy. These flexible options are proving to be a win-win for both students and property owners.

For developers, co-living also offers cost advantages. Conversion projects, such as turning office spaces into co-living units, can lower renovation costs by 25–35% compared to traditional methods. This makes co-living not only an affordable option for students but also a financially attractive opportunity for investors.

Updating Existing Properties

To stay competitive, older properties need updates that align with modern student preferences. Renovations that add smart amenities and fresh designs can significantly boost rental appeal. These upgrades often include aesthetic improvements, interior renovations, and technology enhancements.

Curb appeal plays a huge role in attracting tenants. Tyler McWilliams, COO of Ashland Greene, highlights this:

"When a renter pulls up into an apartment complex, and they see siding falling off, paint that looks really bad, branding that doesn't draw them in and shingles falling off a roof, that's their first impression of the property. They are not going to walk into a leasing office and pay a premium for the unit that we just renovated."

Strategic kitchen upgrades can also deliver high returns. Eric Henrickson, VP of acquisitions at CREC Real Estate, explains:

"If the kitchens at competing properties have granite countertops and stainless steel appliances and are receiving $200 to $300 higher monthly rents than our property, then we will seek to add those types of enhancements."

Technology upgrades are no longer optional. Wendy Burr, VP of sales at Pavlov Media, underscores this point:

"Investing in high-quality internet infrastructure is no longer optional for student housing operators - it's essential for long-term success. By leveraging cost-effective solutions like Wi-Fi 6 while planning for future upgrades, property owners can maximize resident satisfaction, reduce costs and enhance property value."

While network upgrades can cost $50,000 to $100,000, syncing them with renovation schedules can help manage expenses.

Adaptive reuse projects are another cost-effective way to meet demand. Converting hotels into student housing, for example, provides a sustainable solution while appealing to eco-conscious students. Ryan Bodine, SVP at NewGen Advisory, explains:

"15 fastest-growing universities, finding the right property close to campus or near existing student housing makes conversion projects especially viable. It just makes sense to repurpose hotels in these areas to meet the housing demand."

Amenities are also evolving to balance new trends with timeless favorites. Features like larger gyms, pickleball courts, and pet parks (costing around $15,000 to install) are becoming standard. These additions not only attract renters but also enhance property value, especially in areas close to campus where demand remains high.

Investors who adapt to these changing preferences can capitalize on the strong yields offered by student housing, which often outpace those of conventional multifamily properties. Strategic updates to older properties provide a clear path to meeting market demands while boosting returns.

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Data Tools for Better Decision-Making

Investing in student housing requires more than just intuition - it demands real-time data and analytics. With enrollment patterns constantly shifting and student preferences evolving, developers and investors lean on data-driven insights to adapt to market changes and improve returns.

Market challenges, like declining occupancy rates and slower rent growth, underscore the importance of data. For instance, national occupancy rates have slipped from 95.4% to 93.9%, while rent growth during the latest leasing season settled at 6%. Real-time data highlights key factors, such as how proximity to campus drives higher rents, emphasizing the need for precise location-based analysis.

Using Real-Time Market Data

Real-time market data provides critical insights into enrollment trends, housing supply, and competition. Tools like enrollment forecasting help predict housing demand. According to Savills, university applications are expected to hit an annual rate of 1 million by 2030, making it crucial to pinpoint markets poised for growth. Additionally, part-time enrollment is projected to increase by 10% between 2021 and 2031, outpacing the 8% growth for full-time enrollment. This shift creates opportunities for housing solutions that cater to more flexible needs.

Analytics also play a crucial role in optimizing rental rates, concessions, and performance tracking. Access to pipeline data ensures new developments align with market demand. This is especially important given that 83% of community college students either enroll part-time or leave before graduation.

"Simply having data isn't enough. You also need to know what to do with it and how you can use it to drive better insights into property performance, resident satisfaction, and operational efficiency. For us, the goal is for any new initiative or technology to drive measurable value, whether it's through improved operational efficiency, reduced costs, or enhanced resident retention." – Erica White, SVP of technology and strategic innovation, Article Student Living

Real-time insights also guide decisions on space utilization, security, and resident behavior. For example, data reveals that 56% of self-guided tours happen outside standard business hours, offering property managers a better understanding of how and when students engage with their properties.

Geographic analysis further sharpens market understanding. Demand is projected to grow in the South and West, while the Midwest and Northeast may see declines. Combined with data on student enrollment and origins, this information helps real estate professionals identify shifting demographics and preferences. Platforms like CoreCast integrate these insights for seamless analysis.

CoreCast: Complete Real Estate Intelligence Platform

CoreCast takes market data to the next level by offering an all-in-one real estate intelligence platform. It simplifies decision-making across asset classes with tools that handle underwriting, deal tracking, and portfolio analysis - all in one place.

One standout feature is CoreCast's integrated mapping capabilities. Users can view properties alongside competitors in real time, a vital tool when proximity to campus directly affects rental rates and occupancy. With pipeline tracking, CoreCast helps align projects with current market conditions and ensures optimal timing. Additionally, tracking enrollment numbers provides a clear indicator of future housing demand.

The platform's portfolio analysis tools are designed to help investors diversify and manage risks, particularly in a market where occupancy rates fluctuate and rent growth slows. Its reporting features streamline communication by delivering personalized updates on key metrics like occupancy rates, enrollment trends, and market performance.

CoreCast also integrates real-time data to identify emerging markets, anticipate challenges, and fine-tune pricing strategies . Its granular tracking capabilities direct attention to overlooked opportunities, especially at secondary and tertiary institutions that often lack adequate housing supply.

As the student housing sector adapts to changing enrollment trends and evolving student needs, platforms like CoreCast provide the comprehensive insights necessary to stay competitive and maximize returns.

Conclusion: Planning for Student Housing's Future

Shifts in enrollment, evolving student needs, and economic changes are reshaping how investors and developers approach student housing. To succeed, stakeholders must rely on data-driven insights and remain agile in adapting to a rapidly changing market.

Key Points for Investors and Developers

Investors face the challenge of merging traditional investment principles with the realities of today’s market. Recent studies reveal some compelling trends: properties within one mile of campuses experience 1.5% higher annual rent growth, while per-bed leasing models can increase returns by 18–22%.

The fall move-in period is critical, accounting for 73% of annual leasing activity. This makes pre-leasing performance a key indicator of success. Additionally, tracking enrollment trends is essential for predicting future demand. Developers should focus on areas where growing student populations significantly impact local markets.

"In markets primed with opportunity due to growing housing demand, seasoned student housing operators understand the importance of knowing your market and building a strategy that can meet future demand. You need to find a balance between having a future-focused mindset while understanding historical trends that account for what's currently going on in your market." – Beth Gilbert, Senior Director, Product Management, AppFolio

Geographic diversification is crucial as demand patterns evolve. Evaluating portfolios for diversity, proximity to Tier 1 universities, and innovative management practices can help mitigate risk.

Modern students expect technology-driven amenities like remote access systems, high-speed WiFi, online portals, and fast maintenance responses. Striking the right balance between affordability and functionality is now critical for staying competitive. Real-time data plays a vital role in helping investors adapt to these trends, ensuring their strategies align with market demands.

Student Housing Market Outlook

The student housing market remains on a strong trajectory. With its current value exceeding $10 billion in the U.S., the sector is projected to surpass $14 billion by 2027. Globally, college enrollment is expected to reach 377.4 million by 2030, and with only 22% of students living on campus, private developers have significant opportunities.

"I believe at least one reason student housing has proven to be resilient at top universities during broader economic headwinds is the more consistent demand than traditional multifamily housing." – David Walsh, Director of Development, Greystar

Investment in student housing continues to grow, with $8 billion in investments expected in 2024. This momentum is likely to accelerate in 2025, fueled by stabilized rates, institutional funding, expanding enrollment, and loan maturities. Notably, student housing rent growth consistently outpaces that of conventional multifamily housing.

A shift in student preferences is also shaping the market. Extravagant amenities are giving way to practical, well-located properties that cater to both academic and social needs. Students increasingly value convenience, community, and flexible leasing options, with communal spaces becoming a key feature.

Operational strategies will play a decisive role in the sector's future. Emerging practices include dynamic pricing models, mixed-use developments for additional revenue streams, and smart leasing configurations. Tenant retention will also be a priority, with better screening processes, clear leases, and data-informed decision-making setting successful operators apart.

The evolution of student housing mirrors broader changes in higher education and shifting student demographics. As institutions compete to provide better residential experiences, real estate professionals who leverage comprehensive data tools and remain adaptable will be well-positioned to seize opportunities in this resilient and growing market.

FAQs

How are shifts in university enrollment affecting the student housing market across the U.S.?

Shifting University Enrollment and Its Impact on Student Housing

Changes in university enrollment patterns are shaking up the student housing market across the country. In areas like the West and Midwest, declining enrollment has led to a drop in demand for student housing. This has created challenges for property owners and developers, who are now facing increased pressure to adapt. Meanwhile, the story is quite different in the South and some urban centers, where steady or growing enrollment is fueling demand and opening doors for new investments and projects.

These trends underscore the need for stakeholders to keep a close eye on enrollment data. By staying informed, they can better anticipate market demands and adjust their strategies to stay ahead in the ever-changing student housing market.

How do international students impact demand and pricing in the U.S. student housing market?

International students have a noticeable impact on the U.S. student housing market. Their consistent demand for housing near universities often pushes rental prices higher, especially in cities home to prominent or highly regarded institutions. Many international students are ready to pay higher rates for accommodations that prioritize convenience, safety, and close proximity to campus.

Moreover, their preference for fully furnished, well-maintained housing opens doors for property owners and investors to cater directly to this group with customized options. As enrollment patterns evolve, international students continue to be a key driver shaping both demand and rental prices in the student housing market.

How are universities and developers meeting student demand for modern housing and flexible lease options?

Universities and private developers are stepping up their game by creating student housing packed with modern comforts and designed with adaptability in mind. Think high-speed internet, air conditioning, roomy common areas, and on-site fitness centers - all aimed at making student life more enjoyable and convenient.

To meet the varied needs of students, many housing options now feature flexible leasing plans, like semester-based contracts or individual leases. These options make it easier for students to match their housing arrangements with their academic calendars. It's all part of a broader effort to build lively, student-focused communities.