Independent living and assisted living occupancy rates across the Midwest have slowly risen over the past several quarters, but they still remain below national averages of 87.9% and 84.5%, respectively. That’s according to consulting company Plante Moran’s analysis of market trends in the region.

The analysis includes the top 21 metropolitan statistical areas in Illinois, Indiana, Michigan, Ohio and Wisconsin.

Although the Midwest is “currently behind the national average occupancy, the region has recovered from the pandemic in terms of occupied units and reports the highest number of occupied IL and AL units since the NIC MAP Vision Data Service began tracking this data

in 2015,” according to the report.

Senior living inventory growth across the region slowed in 2023, losing seven independent living units and gaining 95 assisted living units in the fourth quarter of 2023.

The Cleveland MSA saw the highest independent living inventory growth, 108 units, among MSAs studied, and the Detroit MSA saw the highest assisted living inventory growth, 109 units, during the fourth quarter. The Chicago MSA lost 196 independent living and 53 assisted living units during the fourth quarter, which, according to Plante Moran, represented the biggest decreases of any MSA in the region.

“Supply seems to have kept up with demand at a regional level, but owners should be careful to assess demand and supply locally before moving forward with any repositioning or new construction to avoid overbuilding,” the authors wrote.

Construction costs

“Construction material prices remain elevated, and coupled with higher interest rates, are leading to more expensive projects,” according to Plante Moran.

According to the Bureau of Labor Statistics’ Producer Price Index, costs for concrete, lumber and steel have increased by 35.3%, 19% and 65.1%, respectively, since January 2020, Plante Moran noted. The PPI for concrete and lumber are up 7.3% to 7.8%, respectively, over last year, whereas steel prices have decreased by 2%.

“Since last month, concrete is down 0.1%, lumber is up 1.2% and steel is up 3.3%,” Plante Moran noted.
Plante Moran addressed overall trends among nursing homes in a previous report.