Senior living
Senior living rents up about 30% in five years as new building slows
A national real estate report finds occupancy rising fastest in assisted and independent living, while only about 21,000 units are under construction and rents have outpaced regular apartments.
Key facts
- About 21,000 units were under construction in the third quarter.
- Rents rose about 30% in five years.
- Assisted and independent living occupancy led gains.
What happened
A new national report from the real estate firm Marcus & Millichap, covered by McKnight's Senior Living on October 29, says demand for senior living keeps growing while new supply is limited. Occupancy rose across the sector, with the strongest gains in assisted living and independent living.
Only about 21,000 senior living units were under construction in the third quarter. Construction of assisted and independent living has fallen roughly 60% over five years, the report said, held back by staffing shortages, high building costs and interest rates.
Senior living rents have climbed about 30% over five years, faster than the just-over-20% growth in regular apartment rents. The authors warned that rising housing costs and slower home price growth are making it harder for some older adults to afford a move. Communities offering more attainable rates than new developments may be better positioned to fill that gap, the authors wrote.
What it means for families
With fewer new buildings opening, the best-value openings may be in existing communities with more modest rates, and waits for popular communities may grow.
Private-pay demand is concentrating among wealthier households, the report said.
Renovated older communities can offer lower prices than brand-new ones.
Transaction activity hit a new high in the first half of the year, with deals up 13%, as large investors added senior housing to their portfolios, the report found.
Prices and availability vary widely by region, so New York families should compare several local communities and ask about rate increases in writing.
What to do this week
- Ask each community for its last three years of rate increases.
- Compare older communities alongside new ones.
- Start touring before a move becomes urgent.
Sources
More from Assisted & senior living
- Few new senior living buildings are going up, and a lender expects 2027 to stay tight
- Fire that killed two at Mississippi assisted living center was started by smoking materials, officials say
- New senior living buildings will stay scarce and pricey through 2030, forecast says