During the 2025 NIC Spring Conference held recently in San Diego, NIC leadership shared the organization’s perspective on the key forces that are shaping the senior housing and care sector today and into the next several years. The goal is to understand how each of these areas is currently impacting our operations, investments, and sector growth as well as how each of these themes define who we need to be moving forward.

1. Escalating Demand: Demand for senior housing and care will be driven by the significant demographic growth of the 80+ population. The baby boomer population is on our doorstep, and they will access housing and services across the full continuum. What is less clear is where and how certain services, such as skilled nursing care, will be provided. The path forward for nursing-like services will not only rely on the traditional nursing home, but on a variety of programs, platforms and innovative models with the goal of providing high-quality care in a less costly setting.
2. Decreasing Supply Growth Rate: While demand is accelerating, the senior housing supply growth rate is declining with minimal new additions to inventory. While exciting to see escalating demand, that can be an indicator of a less-desirable imbalance in what we are able to deliver as a sector. We need to find a path forward to growing our sector and finding new ways to meet the needs and preferences of the aging population.
3. Improving Operating Fundamentals: With the supply/demand imbalance, operating performance is showing strong, positive momentum. Forecasts of national occupancies for senior housing in the mid-90s and growth in NOI margins have contributed to our industry becoming a hot spot in commercial real estate.
4. Increasing Investor Interest: In the world of commercial real estate, the senior housing sector has come into the spotlight. We not only have the committed partners who have historically been invested in our space, but also new types of capital partners allocating dollars to be a part of the future growth of this sector.
5. Stabilizing Capital Markets: We remain cautiously optimistic that we are on a path in the capital markets that is better than what we experienced in 2024 and 2023. Things that we hear today include: there is plenty of private capital out there to invest; 2025 is going to be a strong year for transactions; new capital is coming into our space; and bank lending is improving. We are a growing and maturing sector, and we will need to attract new capital sources along with traditional capital partners. There are also wounds from recent pains that continue to heal and some unknowns in 2025. We are working through a sizeable number of loan maturities this year that, despite Fed rate reductions in the second half of 2024, will still face a different environment than when the loans were originated. Policy changes proposed by the current administration may also have inflationary impacts to the U.S. economy that may ripple through the economy and our sector.
6. Shrinking Workforce: As the population is aging, we are seeing a wave of individuals exiting the workforce. Additionally, estimates are that roughly one-quarter of the senior housing and care workforce are immigrants. Our workforce is shrinking, and we need to find innovative ways to be smarter and more efficient. We are firm in our belief that there are ways to align the ‘high touch’ of what we do every day with the technological advancements in our space.
7. Changing Customer Preferences: What we have offered as our value proposition in prior decades needs to shift. What can we do to ensure that the housing and services that we provide do not simply support additional lifespan but also support years lived in a healthier state, both mentally and physically? In 2023, the U.S. Surgeon General released an advisory on the public health crisis of loneliness and social isolation. Our settings are absolutely positioned to address this crisis and in fact, do so every day. Prevention and wellness efforts that move the needle on health outcomes and reduce difficult acute episodes, such as a fall or a hospitalization, will need to be at the center of our operational models. If we do not adapt, pivot our business models, and continue to grow options (such as Active Adult), we will have failed.
8. Declining Affordability: Rising expenses are resulting in continual rate increases. There are indeed a significant number of seniors in the baby boomer cohort who have the ability to pay for the housing and services they will likely need as they age. However, we have only made incremental progress as a sector in moving the needle on those who cannot afford most of what we have to offer today – the Forgotten Middle. In many consumer circles we are seen as out of touch with the everyday older adult. We are serving some middle-income seniors, but not at the scale or pace that we need to. We need to have the fierce determination to figure out solutions to this problem. A combination of public-private partnerships may be the formula necessary to address affordability in a meaningful way. 

At NIC, we stand by the ‘cautious optimism’ sentiment. As evidenced by the poll of attendees at the conference, most would agree that the outlook is positive. We need to use this time to strategically position ourselves and the industry for the big task ahead.  

Nearly 2,100 attendees took part in the 2025 NIC Spring Conference in San Diego and the overall industry sentiment was overwhelmingly positive. Upon check-in, all attendees were asked to rate their outlook for the senior housing & care sector for the year ahead. As detailed in the chart below, nearly 90% responded “extremely positive” or “positive” and less than 1% shared a negative or extremely negative outlook.

The sentiment from attendees is notably higher than one year ago and is also above what was measured at the 2024 NIC Fall Conference. The percentage of conference attendees with a positive outlook climbed by more than 9% across the past year. 

Similar to other polls, there were differences across respondent type. The financial intermediaries in attendance at the conference had the most positive outlook, with 95% reporting a ‘positive’ or ‘extremely positive’ outlook for the year ahead. The lowest ratings came from healthcare providers. Roughly 85% of this group responding positively. 

The NIC Research and Analytics team will continue to conduct the industry sentiment poll at upcoming conferences, including the 2025 NIC Fall Conference, September 8-10 in Austin, TX.

Data from the recently released 4Q 2024 NIC MAP Actual Rates Report show that: 

As 2024 ended, the senior housing market witnessed a notable shift in pricing dynamics between independent living (IL) and assisted living (AL) properties. Historically, initial rate growth in both property types moved nearly in tandem (see exhibit below), with operators adjusting pricing strategies in response to similar macroeconomic and demand trends. However, since mid-2024, a clear divergence emerged, with IL properties accelerating initial rate growth and reducing discounting, while AL properties experienced a slowdown in initial rate growth alongside increased discounting.  

This shift marked a departure from previous years, when IL operators relied more heavily on discounting to drive lease-ups. Instead, December 2024 data reflected a market where pricing power returned to operators.

While move-ins continued to exceed move-outs in the fourth quarter of 2024 for both IL and AL properties, this break in historical alignment between IL and AL initial rate trends signals a change, and affordability likely played a role in shaping these new market dynamics, particularly in the need-based AL property type, where margin compression poses risks.

Going into 2025 and as care costs continue to rise, price sensitivity in AL is increasing, leading operators to recognize that IL and AL require distinct pricing strategies. IL properties can capitalize on rate elasticity due to their choice-based nature, while AL operators need to navigate the affordability equation strategically to maintain occupancy growth momentum while preserving financial health.

Independent Living Properties: Strong Pricing Momentum and Reduced Discounting

Year-over-year growth in initial rates for independent living properties continued to set new time-series highs in the fourth quarter of 2024, building on the record growth seen in the previous quarter. Initial rates surged 12.9% year-over-year in December 2024, more than doubling the 5.4% increase seen in December 2023. Operators also reduced discounts, with initial rates averaging 5.5% ($238) below asking rates in December 2024, compared to 8.9% ($359) in December 2023. This equated to a 0.7-month discount on an annualized basis, down from 1.1 months the previous year.  

Assisted Living Properties: Slower Rate Growth and Widening Discounts

In December 2024, initial rates grew just 1.7% year-over-year, down sharply from 6.9% in December 2023. Unlike IL, discounting in AL widened, with initial rates averaging 8.6% ($567) below asking rates, compared to 6.4% ($402) in December 2023. This resulted in a 1.0-month discount in December 2024, up from 0.8 months the previous year.  

Additional key takeaways are available to NIC MAP subscribers in the  full report.   

About the Report   

The NIC MAP Seniors Housing Actual Rates Report provides aggregate national data from approximately 300,000 units within more than 2,700 properties across the U.S. operated by 35 to 40 senior housing providers. The operators included in the current sample tend to be larger, professionally managed, and investment-grade operators as a requirement for participation is restricted to operators who manage 5 or more properties. Visit the NIC MAP website for more information.

The following analysis examines broader occupancy trends, year-over-year changes in inventory, and same-store asking rent growth – by care segment – within 571 entrance fee CCRCs and 488 rental CCRCs in the 99 NIC MAP Primary and Secondary Markets.

Entrance Fee CCRCs Lead in Occupancy Rates

Entrance Fee CCRCs Maintained a Higher Occupancy Rate than Rental CCRCs in the Fourth Quarter of 2024. In the 99 NIC MAP Primary and Secondary markets, the occupancy rate for entrance fee CCRCs increased to 91.3%, 3.2 percentage points (pps) higher than rental CCRCs (88.1%) and 5.5pps higher than non-CCRCs (85.8%). In the fourth quarter of 2023, the occupancy rate surpassed 90% and has continued to grow quarter over quarter since.

Rental CCRCs Reported Higher Year-over-year Occupancy Growth than Entrance Fee CCRCs in the Fourth Quarter of 2024. Compared to year-earlier levels, rental CCRC occupancy has increased by 2.1pps while entrance fee CCRCs saw a growth in occupancy rate of 1.1pps.

The occupancy rate of rental CCRCs reached 78.9% in the second quarter of 2021 and has increased for 14 consecutive quarters since, with a cumulative growth of 9.2pps. This increase is more than double the 4.1pps growth seen in entrance fee CCRCs over the same period.

4Q 2024 Market Fundamentals by Care Segment – Entrance Fee CCRCs vs. Rental CCRCs 

The exhibit below compares the market performance of entrance fee CCRCs and rental CCRCs by care segment for the fourth quarter of 2024, highlighting year-over-year changes in occupancy, inventory, and asking rent growth.

Occupancy. Entrance fee CCRCs continued to outpace rental CCRCs in occupancy rate across all care segments. The difference in the fourth quarter of 2024 occupancy rates between entrance fee CCRCs and rental CCRCs was largest in the independent living segment (3.0pps), followed by the nursing care segment (1.1pps), and the assisted living segment (1.0pps), with the smallest gap in the memory care segment (0.8pps).

The highest occupancy in entrance fee CCRCs was seen in the independent living care segment (92.7%), while the memory care segment (89.8%) has the highest occupancy rate in rental CCRCs.

Asking Rent. The monthly average asking rent for entrance fee CCRCs across all care segments remained higher than rental CCRCs. Rental CCRCs showed higher year-over-year rent growth in assisted living (4.9% to $6,179), memory care (5.0% to $7,874), and nursing care (4.6% to $395) segments.

Note, these figures are for asking rates and do not consider any discount that may occur.

Inventory. Compared to year-earlier levels, independent living inventory experienced the largest decline in rental CCRCs (2.5%) and the largest growth in entrance fee CCRCs (0.5%). For rental CCRCs, the memory care segment saw the largest year-over-year inventory growth at 1.4%. This is the only positive year-over-year inventory growth among all care segments.

Negative inventory growth can occur when units/beds are temporarily or permanently taken offline or converted to another care segment, outweighing added inventory.

Look for future articles from NIC to delve into the performance of CCRCs.

Senior housing posted a positive total return of 2.07% in the fourth quarter of 2024, bringing full year 2024 total returns to 3.64%, the third highest NCREIF property type return for the year after hotel (+6.59%) and retail (+5.33%). Senior housing outperformed the broader Expanded NCREIF Property Index (NPI) in both the quarter and year, which posted a total return of 0.94% and 0.59%, respectively. Senior housing capital appreciation in the fourth quarter turned positive for the first time since mid-2022, increasing 0.77%. The capital appreciation return is the change in value net of any capital expenditures incurred during the quarter. Senior housing income in the fourth quarter was also positive, yielding 1.31%. For the broader NPI in the fourth quarter, property valuations continued to move lower (capital appreciation of -0.24%), partially offsetting the positive income return of 1.17%.  

By senior housing property subtype, both independent living (+2.73%) and assisted living (+1.51%) posted positive total returns in the fourth quarter. For the full year 2024, independent living returned 5.60% while assisted living returned 1.95%. In recent years, independent living has also outperformed assisted living over the three- and five-year periods. This outperformance may be driven by higher margins typically generated in lower acuity settings such as independent living, which require less staffing and labor expenses than higher acuity settings such as assisted living. Additionally, independent living has had higher occupancy rates during this period. Over the longer run, since NCREIF began tracking returns data for these subtypes roughly a decade ago, both assisted living and independent living posted similar returns averaging more than 5% annually. 

Annualized Total Returns by NCREIF Property Subtype 
As of 12/31/2024; Unlevered 

Compared to other NCREIF property types over the 10-, 15-, and 20-year periods, senior housing was the strongest property type except for industrial and self-storage, outperforming the NPI on an annualized basis by 39, 26, and 302 basis points, respectively. Since the 2003 beginning of NCREIF’s senior housing historical time series, income yield drove roughly 60% of senior housing total returns, while price appreciation contributed roughly 40%. These performance measurements reflect the returns of 225 senior housing properties valued at $11.72 billion in the fourth quarter. Overall, the number of senior housing properties tracked within the NPI has grown significantly from the 56 properties initially tracked in 2003.

Annualized Total Returns by NCREIF Property Type
As of 12/31/2024; Unlevered

Senior housing market fundamentals remained positive in 2024, with the occupancy rate for the 31 NIC MAP Primary Markets increasing 0.7 percentage points to 87.2% in the fourth quarter, gaining 2.2 percentage points from a year earlier. By property type in the fourth quarter, there was a 0.7 percentage point increase in the independent living occupancy rate and a 0.6 percentage point increase in the assisted living occupancy rate, and both gained more than 2.0 percentage points in occupancy for the full year 2024.

Occupancy increases were driven by another year of robust demand as 2024 net absorption was roughly in line with 2022 and 2023 levels. Inventory growth in 2024 was slightly higher than 2023 but overall remained low and near levels last seen roughly a decade ago. Looking ahead, given the current supply and demand trends, NIC forecasts that occupancy levels will surpass 90% by the end of 2026, which has only happened a handful of other times since NIC MAP began tracking the data.