Senior Housing Occupancy Up For Eight Straight Quarters

Senior housing occupancy rates rose to 83.7% in the second quarter, marking eight consecutive quarters of increases.

Occupancy was up 0.6 percentage points from the first quarter, according to an analysis from the National Investment Center for Seniors Housing & Care (NIC).

The occupancy rate increased 5.9 percentage points overall from a pandemic low of 77.8% in the second quarter of 2021 but remained 3.4 percentage points below the prepandemic level of 87.1% in the first quarter of 2020.

“Continued solid demand for senior housing, paired with relatively slow growth in inventory, has contributed to the current occupancy recovery,” said Caroline Clapp, NIC’s senior principal for research and analytics. “This is the longest period of occupancy rate gains NIC has ever observed, yet occupancy is still below where it was at the start of the pandemic.”

Markets with the highest occupancy rates include Boston, 89%; Baltimore, 87.5%; and Portland, Oregon, 86.9%.

Markets with the lowest occupancy rates were Houston, 78.7%; Cleveland, 80.8%; and Atlanta, 80.9%.

Units under construction accounted for 4.9% of the existing senior housing inventory — the lowest level of construction since 2014. Construction is down 2.8 percentage points from a high of 7.7% in the fourth quarter of 2019.

“Higher interest rates and challenges obtaining financing have continued to slow construction starts activity,” said Chuck Harry, NIC’s chief operating officer. “This bodes well for continued improvement in the occupancy rates over the next couple of years as new inventory coming online will remain limited.”

Occupancy at assisted living properties is recovering faster than at independent living properties. Assisted living occupancy increased to 82% in the second quarter, up 0.8 percentage points from 81.2% in the first quarter. But it’s still 2.5 percentage points lower than its prepandemic level of 84.5%.

The independent living occupancy rate increased to 85.4% in the second quarter, up 0.3 percentage points from 85.1% in the first quarter but still 4.2% percentage points below the prepandemic level of 89.6%.

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