Senior Housing Occupancy Rate Inches Closer to Pre-Pandemic Levels

The senior living occupancy rate is steadily approaching pre-pandemic levels, driven by low construction starts and high demand. In the top 31 metro markets, occupancy rates increased by half a percentage point to 85.6% in the first quarter of 2024. This marks the 11th consecutive quarter of gains. Boston, Baltimore, and Minneapolis led with the highest occupancy rates, while Houston, Las Vegas, and Atlanta lagged behind. The industry is just 1.5% below the pre-pandemic high, with average census 7.8% higher than the low point in 2021. Net absorption increased by 40% compared to the previous year. Lack of new construction starts is a key factor in the rising occupancy, with construction at its lowest since 2010. Experts predict a continued increase in occupancy throughout the year, particularly in assisted living. While the capital markets remain challenging, there may be potential rate cuts in 2024 to boost construction activity in 2025.