Senior housing is poised for significant growth. Operators that leverage data to influence industry partners and encourage new developments and expansions will see substantial returns and long-term growth. The data is clear. Absorption rates are reaching historic highs and outpacing supply growth, which has slowed significantly due to tightening credit and construction lags. The need for investment in the sector is dire and will only grow more complex and dramatic as time passes without action. Operators have a unique opportunity to work with their industry partners to solve one of America’s most challenging societal issues: meeting the housing needs of our aging population.
Below is a preview of what we’ll cover in our session “Let the Data Lead the Way” during the 2025 Senior Living Executive Conference.
A Sector Ripe with Opportunity
Senior housing is a prime investment opportunity. The aging population is growing at an unprecedented rate, creating a demand shift that will sustain for decades. The 80+-year-old population will launch an historically unparalleled expansion over the next 25 years. In addition, senior housing once again has a favorable balance of ideal resident growth versus inventory growth. The credit tightening that significantly slowed senior housing transactions and construction, has in turn slowed supply growth despite surging absorption. The growing supply-demand gap favors owners and investors, especially those with access to capital and that are in a position to buy, build or reposition assets. These factors underscore a demand for senior housing demand that is both durable and long lasting, creating a sound investment that shouldn’t be overlooked.
Development Is Falling Behind
Over the last five years, senior housing has weathered labor shortages, high interest rates and stalled construction. But as the sector navigates these obstacles, opportunities are emerging. Senior housing construction starts have fallen even as occupied units have grown for 15 consecutive quarters, which means the country will need historic near-term inventory growth to keep pace with demand. The sector must develop at nearly twice the industry’s previous maximum construction pace and more than 3.5x the current pace to achieve 90% occupancy in 2030. In fact, the current senior housing development pace indicates a 550,000-unit shortfall by 2030, representing a $275 billion investment shortage in new senior housing units.
Revenue Growth Opportunity
Several data points in the industry’s favor could further drive higher penetration rates. The growing customer base is materially wealthier than past generations. As of 2023, Baby Boomers controlled over 50% of U.S. household wealth, more than double what Silent Generation seniors held at the same age. Plus, while rents in senior housing have increased, they’ve largely been on track with the rise in income and wealth among their target clients. The sector is seeing record occupancy despite regular rate increases. Combined, this demonstrates that affordability for our seniors is not a concern.
Operator Impact
The supply and demand imbalance that exists today not only creates a remarkable investment opportunity, but also surfaces an urgent national and societal issue. Continually growing occupancy indicates America’s seniors will move into seniors housing at the same penetration rate as their parents. Our nation’s operators must partner with investors and developers to ensure our properties are available and open to the next generation of seniors.
The next five years will define the next 25. Senior housing operators have historically risen to many challenges. Now is another opportunity to act. As integral leaders in the industry, operators should leverage data, which demonstrates long-lasting demand growth, stalled supply growth, penetration rate expansion potential and an immense capital shortage, to encourage and inspire much-needed action among their developer and investor cohorts. Operators must act as catalysts to unlock the investment and development that this moment demands. The challenge will not wait.
To hear more, join Arick Morton at 9:45 a.m. on Wednesday, May 21 for the session “Let the Data Lead the Way” during the 2025 Senior Living Executive Conference.
About the author: Arick Morton is CEO of NIC MAP, the premier intelligence partner for the senior housing sector. With a focus on purpose-built, market-specific data and advanced analytics, NIC MAP empowers operators, investors, lenders, and developers with actionable insights that drive smarter decisions and better outcomes. Through innovation and commitment, NIC MAP continues to set the standard for data solutions in senior housing.
