Senior living occupancy saw its 12th consecutive quarter of overall occupancy gains in the second quarter, although independent living broke previous patterns by surpassing assisted living in its occupancy growth, according to NIC MAP Vision’s second-quarter market fundamentals report, released Thursday.

According to data from the 31 NIC MAP primary markets, occupancy in senior living — independent living, assisted living, memory care and continuing care retirement / life plan communities — reached 85.9% in the second quarter, 0.5 percentage points more than the first quarter.

Independent living saw the biggest gain, with an 0.7 percentage point increase, followed by assisted living at 0.5 percentage points. By comparison, nursing homes recorded overall occupancy of 83.9% in the quarter. 

The larger gains in independent living signify a pattern change from previous quarters, during which assisted living experienced greater occupancy growth. But assisted living occupancy, at 84.3%, is within 0.1 percentage points of its 84.4% pre-pandemic peak, whereas independent living, at 87.6% occupancy, is 2 percentage points from its pre-pandemic peak.

“Overall, these are good signs of demand for both property types,” National Investment Center for Seniors Housing & Care Senior Principal Caroline Clapp told McKnight’s Senior Living, adding that the data show that assisted living has “pretty much” recovered from its pandemic occupancy lows. 

With median home values up 50% in recent years, aging baby boomers are “sitting on a lot of home equity and net worth,” she said. That situation, Clapp added, makes a strong case for demand for both independent living and active adult communities, the latter of which has a 92% occupancy rate. 

Boston (90.6%) — the first primary market to achieve occupancy above 90% — Tampa, FL, (88.8%) and Baltimore (both 88.8%) had the highest occupancy rates of the NIC MAP primary markets in the second quarter. Meanwhile, Houston (80.9%), Las Vegas (81.1%) and Miami (82.6%) had the lowest occupancy levels. 

Demand strong, inventory low

Consumer demand remains strong, with a 4.4% increase in occupied units from the second quarter of 2023. Inventory growth was modest, at 1.5% year over year.

“I think we will continue to see developers exercise caution until capital becomes more affordable and accessible,” Lisa McCracken, head of research and analytics for NIC, said in a statement. “We are hopeful that anticipated rate cuts this year will start to trigger more growth.”

Construction starts remained low in the second quarter, with the fewest senior living units under construction since the third quarter of 2014 and the fewest since the second quarter of  2009, which was during the global financial crisis. 

Fewer than 900 new senior housing construction starts were recorded in the second quarter. Access to capital and construction costs remained significant headwinds to senior living development, according to NIC MAP Vision. 

“If you are able to access the needed capital and bring forth new developments in the current environment, you may be well-positioned to capture future expected demand, as the first wave of baby boomers turns age 80 in just over a year,” NIC MAP Vision CEO Arick Morton said in a statement.