‘We Were in Different Places’: What’s Behind a More Bullish Senior Living Industry Outlook 

The outlook for senior living has shifted in a positive direction over the past two years.

That sentiment was found to be on full display following the NIC Fall Conference held in September, with 92% of the nearly 3,200 attendees indicating they are either positive or extremely positive on senior living’s outlook in the year ahead, the highest amount since the National Investment Center for Seniors Housing & Care (NIC) began tracking the data in spring 2024.

“Clearly we were in different places when we look back at the spring and fall events over the last two years,” Lisa McCracken, NIC’s head of research and analytics, said during an Oct. 15 webinar. “Optimism is high, both within the sector – industry veterans that know us and our space well from an investment and lending standpoint – but also those that are new to the space.”

Positive factors leading to this outlook include a positive short-term credit outlook, with continued improvement in operating economics through occupancy growth and strong rent growth resulting in increasing net operating income margins, McCracken said. The next few years are looking promising as well due to strong demographic tailwinds and supply-demand imbalance.

While there are uncertainties with economic conditions, McCracken said, the headwinds are not likely to derail the positives the industry is seeing.

Lending activity is seeing a bounce back compared to 2023 and 2024, although not at the levels seen prior to 2022, according to Jim Costello, executive director of research and development at MSCI, a real estate data and analytics firm. Local and regional banks are becoming the “big players” in the space, he said, making up 29% of originations for the sector.

“Folks are going to look at [debt funds] and think the underlying assets are driven by a very predictable story, so it’s still going to be easy to find people looking to be involved there,” Costello said.

Setting up for success

Over the last three years, the industry has been on record-setting paces. Absorption rates have been increasing on a quarterly basis over the past three years, according to NIC Senior Principal Caroline Clapp. The absorption to inventory velocity ratio has also shown improvements, with units being absorbed more than twice as fast as new ones are coming to market

Part of this is how much faster senior population growth is outpacing new inventory growth, with the latest data from NIC showing the 75+ population has grown by 6.4% in 2025 while new inventory has grown by 1.2%. The last time new inventory exceeded 2% was back in 2021, when population growth was only at 1.7% due to the Covid pandemic and the industry was working to recover from its effects the previous year.

Alongside the number of baby boomers entering the market in the coming years, senior living population trends are encouraging for the industry as well, which shouldn’t have a slow down anticipated until 2050 and 2060. With these population trends, the number of older adults living alone is anticipated to double, according to a forecast from the Census Bureau, and caregiver ratios are declining from six adult children per older adult in 2020 to four adult children per older adult by 2030.

These trends combined are going to be demand drivers for senior living, Clapp said.

Wealth trends among baby boomers have increased as well, with median net worth increasing from $300,000 to $400,000 over the past three years as the generation approaches the market, indicating an increasing ability to pay for higher-end and market-rate housing, according to Clapp.

Alongside these points, occupancy has continued to be on the rise across the sector, with only 16% of properties operating below 80%, 7% of which are below 70%. Nearly 60% are above 90%, according to Bill Kauffman, senior principal at NIC.

Strengthening economics

Operators are also showing improvements in margins and access to capital. Rent growth is above the 10-year average, according to Kauffman, with assisted living at 4.4% as of the third quarter of 2025 compared to the average of 3.48%.

Wage increases for staff are decelerating as well, with average hourly earnings for assisted living employees rising roughly in line with rent growth at 4.7% and all employees, including supervisors, increasing by 5.3%, lower than the same period of 2024.

Offsetting this is the decline in resident turnover rates, which saw decreases in 2023 and 2024, Kauffman said. Combined independent living and assisted living communities saw the greatest decline, from 41.9% to 37.6%, meaning residents are remaining in communities for longer and contributing more to rent. The average length of stay for combined communities has reached over 30 months, indicating a return to 2019 levels.

Deal activity is showing an increase across real estate as a whole, with senior living recently reaching “new heights,” according to a recent report from Irving Levin Associates. That trend can also be seen across all of real estate, particularly in the second quarter, where deal volume was up 11% year-over-year. However, the greater real estate market is still down in deal volume versus the average pace seen from 2015 to 2019, according to Costello.

“All things considered we’re kind of back to normal for the senior housing market, and it’s been looking good of late,” Costello said.

Alongside this, bank lending is seeing an increase despite some worry about large institutions such as Silicon Valley Bank and Signature Bank closing, Costello added. Private credit providers are showing an increased interest in the sector, originating a total of 11% of loans.

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