After a series of high-profile challenges faced by senior living facilities in the wake of the COVID-19 pandemic, U.S. senior housing facilities appear poised for a rebound, according to reporting from The Wall Street Journal.
Occupancy rates at private-pay senior care facilities are nearing pre-pandemic levels, according to new data from the National Investment Center for Seniors Housing & Care (NIC).
“In the fourth quarter of 2023 the average rate was at 85.1% in the 31 largest U.S. markets,” according to the data reported by the Journal. “While that is still 2 percentage points below the first quarter of 2020, it is way up from its pandemic low point, 77.8% in the first half of 2021.
“Rent increases, meanwhile, have been outpacing inflation, with independent living costing an average initial rate of $4,126 a month in December and the more intensive assisted-living units costing $6,422,“ NIC reported.
Some of this reflects “pent-up demand,” according to NIC representatives. Seniors who had previously looked into moving to these facilities but put it off — perhaps due to anxiety about COVID-19’s spread inside such facilities early in the pandemic — saw their needs mount in the intervening time and are now moving forward, according Lisa McCracken, NIC head of research.
“[The needs of seniors] have been amplified because of that delay,” she told the Journal.
Aging in place, however, is still emerging as a dominant preference. In addition to other independent metrics that point to a desire of seniors to age in place, the Journal cites 2022 data from the University of Michigan’s Institute for Healthcare Policy and Innovation, which found that the vast majority of adults ages 50 to 80 (88%) felt it is important to remain in their homes for as long as possible, with 62% saying it’s “very important” and 26% saying it’s “somewhat important.”
Aging in place has become easier and is often a far less costly alternative to senior living facilities.
“Many of these seniors are able to defer move-in decisions partly because improvements in healthcare and new technology have made aging-in-place easier, less expensive and less isolating,” the Journal stated.
“They are able to opt to live at home thanks partly to workplace changes during the pandemic that give loved ones more flexibility to provide senior relatives care and company,” according to Green Street analyst John Pawlowski, who spoke to the Journal.
Half of older Americans are unable to afford private-pay senior living facilities, and many are still wary about the post-pandemic challenges to manage infection rates inside such places. But the demographic trends, in addition to favoring the reverse mortgage business, may also swing more older adults into these types of facilities.
Aging in place could also come with unanticipated challenges, according to NIC. Higher divorce rates among baby boomers and a childless rate of nearly 20% could make the prospect more challenging. This is in addition to a lack of necessary renovations in seniors’ existing homes, which are designed to make aging in place easier to accomplish for longer periods of time.
“While most older adults feel it is important to stay in their home as long as possible, many are not prepared to age-in-place,” professor Preeti Malani, who worked on the 2022 University of Michigan study, told the Journal.
