Senior living occupancy rates, as predicted, increased for the 13th consecutive quarter and are anticipated to continue to increase, tightening the availability of communities as surging demand begins, according to third-quarter fundamentals released Thursday by the National Investment Center for Seniors Housing & Care.
The data showed that the occupancy rate for senior living — independent living and assisted living combined — for the 31 primary markets that NIC MAP Vision follows increased 0.7 percentage points, from 85.8% in the second quarter to 86.5% in the third quarter.
At the same time, the total number of occupied units reached a new high of more than 611,000, reflecting statistics that more older adults are moving to senior living than ever before, according to the report.
Although the independent living occupancy rate (87.9%) continued to exceed the assisted living occupancy rate (85.1%), the gap continued to narrow as assisted living occupancy gains outpaced independent living in the latest completed quarter.
“As more baby boomers reach their 60s and 70s, demand for senior housing is expected to continue increasing and ultimately exceed pre-pandemic occupancy levels by the end of the year,” Lisa McCracken, NIC’s head of research and analytics, said in a news release. “This increased demand, plus the recent decision by the Federal Reserve to cut interest rates, are encouraging signals that the industry is moving toward better conditions for growth, so we can continue to develop communities that meet older adults’ needs at a price they can afford.”
Regionally, Boston (91.3%) and Tampa, FL, (89.2%) once again had the highest occupancy rates among NIC MAP’s primary markets, whereas Atlanta (83.7%), Houston (82.1%) and Las Vegas (79.2%) recorded the lowest occupancy rates.
Growth remains stagnant
Despite increased demand, growth in new senior housing options is at one of its lowest levels in recent history, according to NIC. Construction starts for the past four quarters are on par with 2009 levels after the housing crisis, with only 7,100 spaces breaking ground over the past year. In addition, the third quarter saw the fewest construction starts since 2014, NIC reported.
Total inventory growth for the third quarter was only 1.1% above the third quarter of 2023, a trend that has continued over several quarters.
“The industry does not have enough senior housing options in the development pipeline to meet the growing demand from older adults, so construction needs to ramp up in a smart and measured way or we’ll have a crisis on our hands,” NIC MAP Vision CEO Arick Morton said in a statement. “Data will help determine which markets are ripe for expansions where demand is highest, and the kinds of communities older adults are looking for.”
