America's Senior Housing Demand Is Rising. Construction Isn’t
Summary
The U.S. is experiencing a growing demand for senior housing as the population ages, but new construction of senior housing units is much slower than needed. Costs, financing difficulties, and insurance risks are making it hard for developers to build enough new communities to meet future needs.Key Facts
- The oldest baby boomers are turning 80, increasing demand for senior housing.
- The U.S. will need about 576,000 more senior housing units by 2030 and over 1 million by 2035 if current building rates continue.
- Senior housing construction starts dropped about 67% from over 30,000 units in 2021 to around 10,000 units expected in 2025.
- Senior housing includes various types like independent living, assisted living, memory care, and continuing care communities.
- Occupancy rates for senior housing are high, near 90% in many markets, showing strong demand.
- Financing costs, construction expenses, and insurance risks are major barriers to building new senior housing.
- Insurance costs for senior housing are increasing, with higher loss rates and claim amounts expected in 2024.
- Developers often find it more economical to buy existing facilities than to build new ones due to current costs.
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