Senior living occupancy rates ticked up for the fifth straight quarter as year-over-year rental rates increased at the highest rate in NIC history.
Senior living occupancy increased one percentage point to 82.2% in the third quarter of 2022 in a sign that the post–Covid-19 recovery is steadily marching forward.
Demand has rebounded more strongly for assisted living than independent living, according to NIC. While assisted living occupancy still has not reached pre-pandemic levels, that is to do with new inventory added during the pandemic.
“This is a pretty optimistic report,” NIC Chief Economist Beth Mace told Senior Housing News. “And if it keeps up, it’s good from the point of view of operators, debt providers and equity providers.
Of the 31 primary NIC MAP Vision metro markets, Boston and Minneapolis saw the highest occupancy in the third quarter, registering at 88.3% and 86.2%, respectively; while Houston, Atlanta and Cleveland were at the bottom of the pile, with average occupancy of 76.8%, 78.1% and 79.1%, respectively.
The increase in 3Q was fueled by strong demand outpacing inventory growth. As of the quarter, the number of occupied senior living units registered at only 2,400 shy of pre-pandemic totals in the 31 NIC MAP Vision primary markets.
At the same time, just 2,300 units of new inventory were added to those markets in the third quarter, representing the weakest inventory growth since the third quarter of 2013, according to NIC. Rising interest rates are also putting a damper on construction lending and slowing down the rate of new construction.
Senior living rental rates increased 4.4% from the third quarter of 2021, the biggest increase since 2006 when NIC MAP Vision started collecting the data.
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