Senior Living Occupancy Up for 8th Consecutive Quarter, Still Trailing Pre-Pandemic Levels

Average senior living occupancy rose to 83.7% in the second quarter of 2023, marking the industry’s eighth straight quarter for census gains.

That’s according to the latest occupancy report from the National Investment Center for Seniors Housing & Care and NIC Map Vision.

But while the latest figures represent a sizable gain from the industry’s pandemic-low occupancy of 77.8% in the same period two years prior, the industry still has a hill left to climb before it can return to the 87.1% occupancy rate recorded in the first quarter of 2020, according to Caroline Clapp, NIC’s senior principal of research and analytics.

“Continued solid demand for senior housing, paired with relatively slow growth in inventory, has contributed to the current occupancy recovery,” she noted in a press release. “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.”

Among the 31 major metro areas NIC MAP tracks, the highest occupancy rates for the quarter were seen in Boston, which registered an average of 89.0%. That was followed by Baltimore (87.5%), and Portland, Oregon (86.9%). Markets with the lowest current occupancy levels included Houston (78.7%), Cleveland (80.8%), and Atlanta (80.9%). 

According to NIC Map Vision, assisted living communities are recovering occupancy faster than independent living properties, “likely due to the more needs-based demand of assisted living properties.” The segments saw average occupancy rates of 82% and 85.4%, respectively.

The total number of occupied units rose 0.9% in the second quarter of the year, and total units for senior housing grew by 0.2%. Inventory increased by 1.3%, representing the smallest quarterly gain since 2012, according to the data.

Units under construction during the period made up 4.9% of total existing senior housing inventory, representing a decline from the industry’s high water mark of 7.7% in the fourth quarter of 2019. That marks the lowest level of construction since 2014, according to NIC Map Vision.

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