Senior Housing Occupancy Rates Increase for Seventh Consecutive Quarter

Senior Housing Occupancy Rates Continue to Rise for the Seventh Consecutive Quarter

A new report by the National Investment Center for Seniors Housing & Care has reveals that senior housing occupancy rates have increased for the seventh quarter in a row. Additionally, this news comes as a welcome relief after the pandemic caused a significant reduction in occupancy rates.

Senior Housing Occupancy Rates Increase

According to the report, senior housing rates for the first quarter of 2023 were 83.2 percent, a 30 percent increase from the fourth quarter of 2022’s 82.9 percent occupancy rate. Of the 31 metropolitan areas covered in the report, Boston had the highest senior housing occupancy rate at the end of the first quarter of 2023 at 89.1 percent. In second place, Portland is at 86.6 percent, with Baltimore in third place at 86.3 percent. Meanwhile, the lowest occupancy rates were seen in Houston at 78.5 percent, followed closely by Cleveland at 79.5 percent, and Atlanta at 80.3 percent.

A Slowdown in Housing Supply Growth

One of the key factors contributing to the rise in occupancy rates is the general slowdown in senior housing supply growth. Specifically, new construction rates in senior housing are at their lowest since 2014, with inventory growth down 0.3 percent from the last quarter of 2022 and 1.6 percent on a year-over-year basis. Furthermore, housing units under construction relative to the total existing housing inventory stood at 5.1 percent in the first quarter of 2023, down from 7.8 percent in the fourth quarter of 2019.

Positive Outlook for Senior Housing

Despite the lingering effects of the pandemic and market volatility, housing continues to fare well for the foreseeable future. With occupancy rates, annual rent growth, and annual absorption data all increasing from the fourth quarter of 2022 to the first quarter of 2023, the senior housing market looks stable.

The report also revealed that the assisted living sector increased its occupancy rate to 81.9 percent, up 0.7 percentage points from the fourth quarter of 2022, marking a 7.3 percentage point increase from its pandemic-related low. Meanwhile, independent living is up 3.5 percentage points in occupancy from its pandemic-related low of 85.2 percent.

In conclusion, the senior housing market is experiencing continued growth, and the future looks bright. Despite the pandemic-induced slowdown in construction, the rising demand for senior housing is expected to persist. With lower inventory growth rates and the Federal Reserve’s interest rate hikes making financing for new projects difficult, the senior housing market is poised to see even further occupancy rate increases.