Senior Housing Occupancy Rate Rises for Sixth Straight Quarter

Demand for senior housing continues to outpace inventory growth, resulting in rising occupancy rates for a sixth consecutive quarter, according to a new report for Q4 2022 from NIC MAP Vision.

It was another incremental rise – just .9 percentage points – but that added to a 5.2 percentage point rise overall since a pandemic low of 77.8% in Q2 2021.

“Because new inventory has been added during the pandemic, the occupancy rate has not yet reached pre-pandemic levels,” according to the report.

Approximately 3,300 units were added within the 31 NIC MAP Primary Markets during this quarter, while more than 8,600 units were absorbed on a net basis.

“This robust demand led to a record high total number of occupied units: within the NIC MAP Primary Markets, the total number of occupied units exceeded 574,900, surpassing its pre-pandemic first quarter 2020 level by nearly 7,000 units.”

Higher Interest Rates Could Affect 2023

Beth Burnham Mace, NIC’s chief economist, said in a prepared statement, “Development activity slowed sharply in the second half of 2022 as the rise in interest rates and a more stringent lending environment slowed loan issuance.

“With higher interest rates expected in the early months of 2023, slower development pipelines are likely to continue, which could continue to impact inventory growth and therefore positively affect occupancy rates.”

Twenty-eight of the 31 NIC MAP Primary Markets saw occupancy increases in the fourth quarter of 2022.

Boston (88.9%), Baltimore (86.7%), and Portland (86.2%) had the highest senior housing occupancy rates, and Houston (77.9%), Atlanta (79%), and Cleveland (79.4%) had the lowest.