The U.S. student housing sector enters the 2025–2026 academic year with improving clarity across both property and capital markets. While macroeconomic uncertainty, interest rate volatility, and immigration policy shifts continue to influence sentiment, Cushman & Wakefield’s latest student housing report points to a sector that has stabilized and is positioning for renewed growth.
Occupancy remains resilient; rent growth has normalized to sustainable levels, and valuation metrics suggest pricing has bottomed, particularly in top-tier university markets.
Property Market Fundamentals Remain Resilient
As of the start of the Fall 2025 semester, national average asking rents reached approximately $1,017 per bed, reflecting 3.4 percent year-over-year growth, while average occupancy held at 91.6 percent. Despite new supply deliveries, occupancy declined only modestly, underscoring the sector’s ability to absorb inventory.
Pre-leasing trends remain a key bright spot. National pre-leasing exceeded 91 percent, with Power 4 conference universities materially outperforming at roughly 95.6 percent pre-leased. These flagship institutions continue to benefit from strong enrollment, limited on-campus housing, and sustained student preference for purpose-built assets near campus.
Supply Constraints Support Performance
Construction activity continues to trend downward as a share of existing inventory, improving supply-demand dynamics across most markets. Extended development timelines, higher costs, and capital discipline have slowed new starts, particularly in Tier 1 university markets. This constrained pipeline is expected to support occupancy and rent growth going forward.
Valuations and Capital Markets Show Early Recovery
Student housing valuations appear to have stabilized, with Cushman & Wakefield’s valuation indices reporting average values of approximately $129,000 per bed and average capitalization rates of 5.38 percent. Assets located within 0.5 miles of campus continue to command significant valuation premiums, averaging roughly 33 percent higher than assets located farther away.
Transaction activity is also improving. Institutional capital represented approximately 35 percent of year-to-date investment volume, while cross-border investment increased to 11 percent. As interest rates stabilize and debt markets regain liquidity, investor confidence is gradually returning.
Debt Maturities Remain a Key Watch Point
More than $12 billion in student housing loan maturities are scheduled over the next 24 months. While this has contributed to an increase in distressed transactions, distressed sales remain limited to approximately 2.3 percent of total volume, well below historical recessionary levels. Improving property fundamentals and increased refinancing activity have helped mitigate broader distress.
Takeaways
- Student housing fundamentals remain durable entering the 2025–2026 academic year.
- Rent growth has normalized, while occupancy and pre-leasing remain strong.
- Construction activity is below historical norms, supporting favorable supply-demand dynamics.
- Valuations appear to have bottomed, with early signs of recovery.
- Institutional capital is gradually re-entering the sector as capital markets stabilize.
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