Student Housing: A Resilient Asset Class in a Shifting Market

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Student Housing: A Resilient Asset Class in a Shifting Market

3/5/2026

Kevin White

Head of Research, Real Estate, Americas, DWS

Durable Fundamentals
The U.S. purpose-built student housing (“student housing”) market continues to demonstrate durable fundamentals as it moves through the 2025–2026 leasing cycle.^[1] Final academic year occupancy was estimated at 94.5 percent in September 2025, up 80 basis points year-over-year and posting the second-highest level since 2019.^[1] Fall 2026 preleasing activity began with strong momentum as students continued the trend of securing housing – reaching 58.5 percent in February 2026, exceeding the 54.1 percent of February 2025.^[1]

Student Housing: Prelease Curves

Sources: Yardi Matrix (Yardi 200). As of February 2026.

Demand Side: Steady Enrollment Trends
Fall 2025 marked the third straight year of steady growth in enrollment at the nation's colleges and universities.^[2] Enrollment grew one percent from fall 2024, driven by undergraduate gains (+1.2 percent) while graduate enrollment remained broadly stable (-0.3 percent).^[2] Total enrollment in the fall was about one percent higher than it was in fall 2019, indicating recovery from the impacts of the COVID-19 pandemic and 2020 campus shutdowns.^[2]

Leading the enrollment growth in 2025 were major public universities, which defied expectations and exceeded previous records.^[2] Public four-year institutions experienced a 1.9 percent increase in freshmen (+18,000 to 971,000 students) while private 4-year institutions saw declines.^[2]

Supply Side: New Deliveries Have Peaked
Some 27,000 new student housing beds were delivered nationally in 2025, a steep drop from the 35,000 delivered in 2024.^[3] Some 38,500 beds are under construction, 26,500 due in 2026.^[4] We expect supply as a percentage of stock to remain near a 15-year low, which should provide support for student housing fundamentals.^[4]

Balanced & Sustainable Growth
Over the past few years, student housing has outperformed compared to traditional multifamily.^[4] The average asking rent for the recent leasing cycle was $926 per bed, representing a 1.5 percent annual growth. This was down from 5.1 percent in fall 2024 school year and 7.1 percent the prior year.^[4] However, it outpaced the broader multi-family sector, which has hit a soft patch with overall asking rents dropping -1.1 percent in January from a year ago – the sixth straight month with negative growth.^[4]

Overall, we believe recent market data highlights a student housing market that is transitioning into a more balanced and sustainable growth phase, while large public institutions maintain healthy demand drivers and long-term resilience.

Outlook:
The higher education landscape in the U.S. is evolving rapidly. The number of high school graduates is expected to start falling in 2026, forcing colleges to adapt to a shrinking applicant pool.^[4] We anticipate there will likely be a growing gap between large Tier 1 institutions with steady enrollment growth and improving student profiles, and smaller public or private institutions, which struggle to attract students. That gap could widen if smaller schools, particularly those reliant on international enrollment, continue to face pressure.^[5] Our assessment is that Power 4 markets, flagship public universities and the most elite academic institutions will continue to grow their market share as enrollment growth consolidates. As capital returns, investor demand in the student housing sector is becoming more concentrated around institutions and assets with durable operating fundamentals.^[6] Our 2026 outlook is that student housing is well-positioned to remain one of the more resilient asset types in real estate, but asset and market selection are paramount to performance.

Additional Resources

Real Estate Minute | January 31, 2026

1/31/2026

2026 Real Estate Outlook

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