Realtor.com – The traditional start of the academic year has historically been a time of enthusiasm, energy and anticipation for college students. For first-year students, it is a time of new beginnings, new experiences and new connections. For returning students, the fall semester re-unites friends, and brings the promise of new knowledge. And for many companies, the back-to-school period means increased advertising and promotional discounts for everything from classroom supplies, books, clothing, and household necessities.
This year, however, the back-to-school process has come with a noticeable sticker shock. Tuition is rising, along with inflation which is impacting the cost of everything from food to pens, paper, towels and school clothing. Just as importantly, from a real estate perspective, the shortage of affordable housing inventory pushed prices to record-highs and forced more prospective homebuyers into the rental market in June, driving the U.S. median rent to a new high of $1,575, an 8.1% increase year-over-year.
In addition, many university towns have become attractive destinations for retirees and remote workers. The need for more space and affordability in the era of remote work is further adding pressure on local real estate markets. With the uncertainty brought about by COVID compounding the rising prices and lower inventory, students are facing a more challenging housing market in their college towns than ever before.
Within this context, Realtor.com partnered with JUV to survey a national sample of students planning to attend college or graduate school in the fall of 2021. We wanted to find out about their experience with seeking and securing housing for the fall semester, in light of current real estate market conditions. The data shine a spotlight on a challenging environment, with students struggling to afford a place to live and needing family assistance to manage the sharply rising costs of education.
Over 30% of students are freshmen entering the college experience
With 34% of students entering their first year of college studies, many experiences are new, and navigating the start of the fall semester can be a challenge. For the 43% of students who are returning, while the academic process may be old hat, finding affordable housing remains an obstacle to overcome.
At many colleges and universities, first-year students are required to live on campus, as part of a traditional onboarding process, which fosters camaraderie with other students, and is designed to both ensure longer-term retention, as well as provide revenue for the institutions’ dorms. Our survey found that 22% of colleges and universities still require freshmen to live on campus in college-owned housing. However, in a sign of the unusual conditions, 9% said that their institutions are allowing freshmen to live off campus in non-university owned housing. Meanwhile, for 54% of students, their institutions allowed first-year students to live off-campus in prior years, as well.
Over one-in-three college students have not yet finalized fall housing arrangements
For many college students, particularly first-year ones, finding housing can be as easy as opting for a required or available university dorm. However, with increased flexibility, uncertainty, and costs going into this fall, 34% of students have not yet finalized their housing arrangements, which is likely compounding the process of navigating a return toward a semblance of normalcy.
Of those 34% who have yet to find a place to live, mere weeks away from classes starting, a large share were impacted by the evolving COVID reality, and they were unsure about their housing needs. With many colleges and universities still working through their return-to-campus plans, students reported waiting for more clarity, and in some cases, missing available on-campus housing.
Evolving pandemic health concerns and re-opening uncertainty are causing housing delays
For many students who delayed their plans to find housing due to the broader uncertainty surrounding COVID and the new academic year, the main reason (30% of respondents) was a lack of information from colleges and universities about whether they would hold in-person classes. The other main reasons were clustered around direct health impacts and social distancing concerns. For 17% of students, COVID impacted their families in ways that required them to stay home, while 14% had parents who were not comfortable with their children being on campus this fall. Another 14% reported that their schools had not clarified whether they would re-open their on campus dorms.
Local real estate market conditions negatively impacted 44% of college students
In addition to the uncertainty brought about by a pandemic which continues to evolve, alongside shifting government and private sector responses, changing real estate market conditions are negatively impacting 44% of college students headed into the fall semester. Close to one-in-ten students reported they could no longer afford to live off campus this fall. Mirroring a very competitive environment with higher rents, 11% of students cannot find an off campus apartment because of the increased demand, with another 11% having trouble competing against other renters who have stronger financial qualifications.
While 56% of college students lived at home last year, only half of those plan to do so this fall
The COVID pandemic’s quarantines and social distancing requirements pushed many higher education institutions to move full or part-time to a virtual environment during the fall 2020 semester, while some continued into the spring 2021 one, as well. Students adapted to those changes in various ways. While 16% continued to live on university dorms on campus, 26% stayed off campus. Meanwhile, 56% chose to live at home with their families. In all, the majority of students (82%) spent the 2020-21 academic year in off-campus housing.
In contrast with last year, students planning to attend college in the fall of this year are decidedly opting for housing nearer their college or university. Only half of the students who lived at home with family last year are planning to do so this fall. Most of the other half is either moving on campus in university dorms, or planning to stay off-campus in rental housing. Overall, 61% of all students planning to attend college this fall aim to live off campus, a sign that academic life is also moving toward normalization.
About one-in-three students say it’s much harder to find an apartment this year
Colleges and universities are either enmeshed in the fabric of the cities where they are located, or in many cases, the dominant employer and economic driver for a town. As such, they are fully immersed in their local real estate markets. The shortage of housing inventory and sharply rising prices and rents are impacting this year’s college students. Over 30% of students who lived off-campus in the 2020-21 academic year indicated that it was much harder to find an apartment this year compared with a year ago. Close to a quarter of them said that the places they considered booked very fast due to heightened competition.
Compounding the challenge of finding a place to live, for students who lived off-campus last year, this year’s housing seems to come with higher prices as well. Over 25% of students reported that their rent for this year is higher than it was a year ago.
Given the competitive environment and high rents, for the 61% who plan to live off campus this fall, the search for housing has taken longer. Close to four-in-ten students looked at six or more real estate listings in person, while trying to find a place to live, with 6% visiting over 20 places, a clear signal that rental housing is mirroring broader market trends.
Thirty-five percent of students cannot afford to rent an apartment in their college town
Real estate market challenges and shifts in preferences are clearly having a negative impact on college students this year, with 35% of them saying that they cannot afford to rent an apartment in their college town. In addition, with the delta variant of COVID on the rise, 26% report feeling uncomfortable sharing housing this year due to pandemic safety concerns. In light of these obstacles, it is not surprising that 26% of college students need help from their parents to manage rising housing costs, with 19% receiving financial help this year and 7% enlisting their parents as co-signors on apartment leases. What stood out in the survey is students reporting that neither of these parental assistance measures were necessary last year.
Over half of students adjusted their living situation to save money
In light of existing real estate challenges, 55% of students are taking steps to save money by adjusting their living situation. Of these, 21% are choosing to live at home with parents in order to avoid rental expenses. In addition, 13% are taking on more roommates, and 10% are opting for lower quality accommodations. Interestingly, for 5% of students, moving back into university-owned dorms is helping lower the costs of housing compared with off campus options.
Students, families, as well as colleges and universities are making great efforts to navigate a highly uncertain time as they approach the new academic year. As the health challenges continue evolving, it is obvious that the road ahead remains cloudy. With the added pressures of expensive and limited housing, the 2021-22 academic year will only add to the upcoming tests facing incoming and returning college students across the country.
We should collectively endeavor to help this young generation not only pass this test, but also be better prepared for a changing future ahead of them. As they make their first steps into adulthood, this generation is already showing a clear understanding of the role and dynamics of real estate markets.
Methodology: Realtor.com® commissioned JUV to conduct a national survey of students planning to attend college in the fall of 2021. This survey was conducted online within the United States from July 12 – July 17, 2021. The survey was conducted among 501 young adults who are current college students or recent graduates by JUV Consulting. The sampling margin of error of this poll is 4%.