A new report from the National Investment Center for Seniors Housing & Care (NIC) shows that older adults today are moving into senior housing at record rates – so fast that their occupancy rate increased 0.8 percentage points between the first and second quarters of this year, from 87.3% to 88.1%, or from 619,800 to 625,800 units.
Census data shows that the number of Americans over the age of 65 is steadily growing, and now numbers 59 million senior citizens – 18% of the U.S. population. By 2040, the number will have increased to 78 million, or 22% of the population.
At the same time, the supply of housing in senior communities is not keeping up. In 2Q 2025, the number of newly available units fell to just 809 -- its lowest point in two decades. For seniors with limited incomes, the challenges will be even worse. According to the report, almost half will not be able to afford to pay for private housing as rents continue to rise.
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It found rents for independent living communities rose 4.25% to $4,402 a month compared to 2Q 2024. Rents for assisted living communities climbed 3.97%, soaring to an average of $6.976 a month. “We need more housing units for America’s older adults overall, and we need more affordable options for those with modest incomes,” said Caroline Clapp, senior principal at NIC.
However, the trends between the first and second quarters of 2025 were not favorable. Rent for senior housing overall rose 0.1% to 4.1%, absorption remained unchanged at 3.7%, inventory declined from 1.2% to 1% and so did construction compared to inventory, from 2.6% to 2.4%.
According to NIC CEO Arick Morton, changing economic conditions and public policy developments are driving capital providers and developers to be cautious about taking on new senior housing projects, widening the gap between future supply and growing demand.
The greatest demand is for independent living properties. Occupancy of these units rose 0.8 percentage points to 89.7%. Occupancy of assisted living properties climbed 0.7 percentage points to 86.4% -- the third successive quarter in which independent living occupancy grew more than assisted living.
Active adult rental communities had 92.3% occupancy in 2Q 2025. “Baby Boomers appear to prioritize mental, physical, and social wellness, and they’re choosing to move into independent living and active adult communities because that lifestyle is baked into the experience,” Clapp commented.
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