What are the top student housing trends in 2023?
That’s what you’ll learn today, including:
- Why student housing is growing so fast
- 13 noteworthy trends in the student housing market
- What the future of student housing looks like
…And much more.
The top trends we’ll look at are:
Interested? Keep reading!
Key student housing trends in 2023
At a glance, here are some of the top student housing trends you need to know.
- The student housing investment market is now worth over $10 billion in the U.S. alone – and its value is expected to exceed $14 billion by 2027
- For students, the cost of renting a bed in a student housing facility has increased by more than 7% in 2023 alone – and over the past 20 years, room and board costs have spiked by over 50%
- The middle-class population (which invests heavily in higher education) is expected to hit 5.3 billion by 2030
- Projections indicate that by 2040, there will be 594 million college students worldwide
- In America, an estimated 8 million college students need housing close to their university
- 63% of U.S.-based students rent out private rooms
Now that we’ve quickly gone over some of the most important statistics, let’s talk about what the student housing market size looks like.
Student housing market size
Is there really a demand for student housing in 2023?
In a word, yes.
The student housing investment market is now worth over $10 billion in the U.S. alone.
In fact, after a brief but dramatic dip in enrollment in 2020 due to COVID-19, the market value doubled the following year and has stabilized as the world has gone back to normal.
With that, let’s talk about what you came here to learn:
What are the key student housing trends to know in 2023? Keep reading – that’s what we’re going to cover next.
1. Student housing is in high demand
Student housing is in high demand.
In 2023, the demand for affordable housing options still largely outweighs the current supply.
The cost of renting a bed in a dorm has spiked by more than 7% in 2023 alone.
So, many young adults who would otherwise stay in a dorm for the duration of their studies are now being forced to look for less expensive options off-campus.
This phenomenon is driving the demand for affordable student housing even more – and it’s not expected to change anytime soon.
Increase in college enrollments
By 2030, college enrollment is expected to hit 377.4 million. To give you some context and a better idea of what that number means, there were only 99.9 million college students in 2000.
That’s an increase of over 277% – in just thirty years.
And, of course, all those students will need to live somewhere, which means student housing is (and will continue to be) a scalable, long-term investment option.
An influx of international students
The OECD predicts that there will be approximately 8 million students who travel internationally for their studies by 2025.
That’s an increase of 3 million since just 2019.
And since international students are much less likely to have family or friends in the area, again, these students will be dependent on affordable housing options for the duration of their studies – which, for some students, can be many years.
In fact, students who enroll in university programs aren’t always first-year freshmen. In many cases, they’re graduate students studying for master’s or doctoral degrees.
According to the NCES, graduate enrollment rates are expected to reach 3.4 million students by 2031.
Clearly, that’s good news for the student housing sector.
And, based on a recent report, a record number of university beds were preleased for fall 2023 as early as December 2022.
In other words, despite the high inflation impacting the housing market as a whole, the student housing space has continued to see high transaction activity this year.
2. Student housing is focusing more heavily on community
Downtime is part of a balanced academic life and the current trend toward more community-centered student housing points to that.
These days, students want more offline opportunities to connect with their roommates and friends outside of class.
There’s a growing emphasis on communal areas in student housing properties that can accommodate things like ping-pong tables to foster connection.
In fact, this trend is in line with new research on Gen Zs, the first generation to grow up with the internet.
According to Stanford University’s findings, Gen Zs prefer meeting in person, despite being the most tech-savvy generation to date.
This generation also places a stronger emphasis on academics compared to people who went to school during the Great Recession.
In other words, having easy access to things like pools and tanning beds isn’t as important to today’s students as having well-thought-out study areas.
Why is this trend noteworthy?
Because it means that many expensive student housing amenities of the past don’t need to be a priority anymore. This will shape what investors focus on offering in their student housing facilities for the foreseeable future.
3. Student housing is becoming more privacy-focused
Despite the increasing demand for communal areas in student housing facilities, today’s students still prefer renting private rooms instead of sharing a cramped dorm room with a stranger.
This trend applies across the board, but it’s particularly apparent among international students.
In fact, as we’ve seen, around 63% of student housing consists of private rooms instead of dorms.
Clearly, the on-campus housing shortage is one factor that’s driving demand for affordable, private, off-campus options – and this trend will likely continue as more students enroll in higher education.
That leads to the next trend, which is:
4. There is an increased demand for off-campus housing
In America, just 22% of college students live on campus, in part because of a continuing gap between available beds on campus and student demand.
So, the vast majority live in various accommodations off-campus.
And this is actually a growing preference among students in general. Whether they’re freshmen or in graduate school, students value their own space, and off-campus housing is more likely to offer that.
But, according to research, 8.6 million students still struggle to find the housing they need close to their college.
What areas are most popular?
As we’ll see further on, students don’t want to deal with a lengthy commute, regardless of what school they attend.
5. Gen Z cares more about causes, including sustainability
According to recent data from the Global Student Living Index, 87% of student responders said that student accommodation should be getting more sustainable.
Other data from 2023 shows that 83% of Gen Zs are concerned about the environment.
At the same time, students surveyed were overwhelmingly unwilling to fit the bill to have more eco-conscious accommodation.
Only 8% said they were ‘very willing’ to pay extra.
These findings are in line with the results from a 2022 survey on Gen Zs and Millennials, which found that the #1 concern for Gen Zs is the cost of living.
While today’s students are sustainability-conscious, they’re generally not prepared to choose a more sustainable housing option if it comes with a higher price tag.
6. Co-ed housing options are emerging
When it comes to living arrangements and deciding where they want to live, Gen Z students place less emphasis on gender than older generations did.
Male and female students are starting to have more options regarding who they live with. Unsurprisingly, this trend is in part the result of strong campaigns to expand co-ed housing options on campus.
Wondering what kind of tech students want access to in their student accommodations? That’s what we’ll look at next.
7. Students value fast internet and smart technology
Even in 2023, with many remote classes and virtual school-related events a thing of the past, students still expect access to faster internet and better technology than before COVID-19.
According to an internal focus group, the amenity that’s most in demand among students is strong Wi-Fi.
And that makes sense.
After all, whether for getting homework done, gaming, or shopping online, having a strong signal is a necessity.
On the other hand, students don’t care about having access to cable TV, since they have their own streaming devices anyway.
So, what kinds of smart technology matter to today’s students? Here are a few:
- Smart security systems – With things like key fobs and cards, students can get in and out of their student housing facilities without having to carry bulky keys around.
- Smart lighting – By setting up smart lighting technology, students can adjust their lighting right from their phones.
- Video intercoms – Being able to see who’s at the door before opening is a big advantage and helps increase security.
Ultimately, the trend toward smart property technology isn’t going anywhere. In fact, the PropTech market will be worth an estimated $64.3 billion by 2028.
8. Students want convenience
Between classes, homework, and side jobs, students don’t have much time to prepare meals or shop because they’re constantly on the go.
Also, a lot of students don’t have their own transportation.
Having the option to live in an area where they can order take-out or go shopping without a car is a huge plus.
9. Commutes to school are getting greener
As we saw earlier, today’s students are less willing to travel long distances to commute to university.
Instead, they prefer greener options like walking or biking – a trend that started growing in popularity during COVID-19.
Leisure bike sales were up 121% in early 2020 as more people looked for opportunities to get outside and exercise.
This trend has helped pave the way for increasing demand for student housing options in walkable neighborhoods.
As we already touched on briefly, the most popular housing among student renters is located within a half-mile of campus; it gets pre-leased 61.9% on average, outperforming properties that are further away.
10. Students want affordable housing with functional amenities
Unsurprisingly, students typically don’t earn a lot of money. 34% of undergrads and 38% of grad students make less than $20,000 per year while they’re in school.
And being in that income bracket corresponds with another relevant statistic: Over 8% of college students risk becoming homeless.
What does this mean for the student housing market?
It means this: Affordability is top of mind for students. And as rent prices hit historic highs, that’s unlikely to change any time soon.
As we saw earlier, the cost of renting a bed increased by over 7% in 2023 alone, and this hard reality will force a lot of students to find cheaper alternative housing arrangements off campus.
This leads to the next trend, which is:
11. Housing options for student parents are few and far between
Students come from all backgrounds and walks of life, and many go back to school after already having started a family.
In America alone, the number of student parents who are pursuing undergraduate degrees has hit nearly 4 million so far.
To put that in perspective, more than one in five students in the U.S. are parents.
Only 8% of academic institutions are in a position to offer adequate housing arrangements for students and their children.
This puts student parents (who are disproportionately low-income and people of color) at higher risk of dropping out of school.
66% of student parents don’t have stable housing for their family, and 16% face homelessness – much more than students who don’t have kids.
There’s a gap in the market for student housing facilities that can cater to student parents, and this gap will likely grow as universities pour their funding into other priorities.
12. The student housing market will likely remain strong through recessions
Historically, student housing has long been considered ‘recession-proof’.
And for good reason.
After all, when the job market is bad and high-paid jobs are hard to come by, investing in higher education feels like a smart move.
The data shows that a lot of people think in those terms during economic downturns.
Around the time of the 2008 recession, college enrollment increased by almost 2.5 million. This increase mainly came from laid-off adult learners who had exhausted their other options and believed higher education would be their best shot at finding another job.
So, bottom line: Recessions tend to have a positive effect on the student housing rental market, and this will likely continue.
13. Despite high demand, student housing deals are slowing down due to high interest rates
As we saw earlier in this article, one of the top trends is the growing demand for student housing.
But at the same time, interest rates are way up.
And as a result, investors (buyers and sellers) are more hesitant to make deals. Buyers are willing to pay less for student housing property, while sellers aren’t willing to cut prices.
Rising rents do make up for some of the uncertainty, but the market is slower than usual.
However, while student housing valuations have declined, it has declined at a slower pace compared to other property types.
The future of student housing
What’s ahead for student housing?
Clearly, things like affordable rent, the ability to live near campus, and easy access to high-speed internet will continue to influence where students choose to stay during their college years.
What’s also clear is that there’s a huge demand for student accommodation that continues to go unmet as policymakers prioritize other agendas.
For example, in California, Governor Newsom has attempted to put the brakes on a proposal that would offer thousands of students affordable housing for the 2023-2024 school year thanks to a $750 million housing grant.
Ultimately, regardless of what policymakers decide, one thing is for sure:
The current student housing trends are creating an ideal opportunity for investors to offer students affordable housing and fill a growing gap in the market.
So, there you have it! Those are the key student housing trends to know about this year.
If you’re interested in getting started in student housing investment, you now have a better idea of what the market looks like and what students value most.
Still need help?
As a student housing investor who brings in five figures per month in mostly passive income, I now coach people who want to do the same – while avoiding the common newbie mistakes I made when I was new to investing.
If you’re ready to take action and scale a student housing rental business so you can do things like…
- Have more time with your family and friends
- Earn enough money to replace the income from your job
- Travel more
…then my coaching is for you. Even if you don’t know anything about real estate investing yet, I can help you become a confident, savvy investor.
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