Senior housing demand forecast is bright

Demand for senior housing is strong with overall occupancy high and inventory growth low, according to reports from Partner Valuation Advisors and JLL.

The aging adult population and longer life expectancies are boosting demand for independent living, assisted living, and memory care housing. The population of U.S. adults 80 years old and over is projected to grow 36.6% over the next decade. That dwarfs the 5% projected total population growth during that period.

Last year, demand for senior housing accelerated and the past 18 consecutive quarters resulted in occupancy growth. Costs for residents continue to rise. Senior housing rents have grown 28.8% from pre-Covid levels to a monthly average of $5,479.

New supply is limited due to high construction costs and tight capital availability. Labor expenses remain a key concern. Affordability continues to be a near‑term challenge for middle‑income seniors, with newer homes fetching higher monthly rates.

Despite the challenges, transaction activity hastened in the past year, and investor confidence rebounded with banks stepping up lending for the sector in both refinancing and acquisitions.