Occupancy rates continued to climb for the nation’s senior housing sector in the first quarter as demand rises and development remains stalled. According to the National Investment Center for Seniors Housing & Care (NIC), senior housing occupancy inched up to 89.5% in the first quarter from 89.1% in 2025’s fourth quarter. This is the 19th consecutive quarter to see increasing occupancy rates.
The number of occupied senior housing units jumped by over 3,000 in the first quarter to 637,000. However, new units under construction dropped to their lowest level since 2012, and year-over-year inventory growth hit a record low of 0.4% in the first quarter.
“We aren’t yet seeing new development pick up, and the bottleneck is largely on the capital side, not from lack of demand,” said Lisa McCracken, NIC’s head of research and analytics. “With elevated costs for labor and materials, and property valuation dynamics, many groups simply aren’t ready to pull the trigger on projects just yet. As a result, investors favor acquiring existing properties over new construction, which puts pressure on the availability of senior housing for the consumer.”
According to data from NIC MAP, at the current pace of demand and development, senior housing is on track to go above 90% occupancy by the end of 2026, further tightening availability. In the first quarter, independent living occupancy was above 91%, and assistant living occupancy was 87.9%; however, active-adult communities experienced a moderate quarter-over-quarter decline of 0.7 percentage points to 91.2%.
NIC MAP tracks occupancy rates in 31 key markets: 10 saw occupancy rates above 90% in the first quarter compared with seven in 2025’s fourth quarter. Boston led the way, with a 93.6% occupancy rate, followed by Baltimore, 91.8%, and San Francisco, 91.6%. Atlanta at 86% had the lowest rate, followed by Miami at 86.2% and Las Vegas at 87%.
“Senior housing is necessary, not discretionary, but new development has not kept the pace with historic demographic demand,” said NIC MAP CEO Arick Morton. “Prospective residents and their families should start searching for where they want to age earlier, especially in markets where occupancy is already high.”
According to NIC, the single-family housing market may be having an impact on active-adult communities, which are age-restricted multifamily properties with a lifestyle focus.
Data shows only 464 new active-adult units were added in the first quarter across 874 active-adult rental properties tracked by NIC MAP, totaling nearly 130,000 units.
“Slower home sales may contribute to the dip in active-adult occupancy since many older adults sell their home before moving to an active-adult rental community,” added NIC senior principal Caroline Clapp. “Because active adult is a lifestyle choice rather than a decision based on an urgent need, prospective residents may be more likely to delay decisions in periods of economic uncertainty.”
With the nation’s 15 largest active-adult rental markets, Los Angeles had the highest occupancy rate in the first quarter of 97.2%, followed by Virginia Beach, Virginia, at 96.2%, and San Diego at 95.1%. The lowest occupancy rates for the quarter were in Phoenix at 85.1%, Austin, Texas, at 85.2%, and Kansas City, Missouri, at 89.6%. Recent Sun Belt supply increases likely contribute to the lower occupancy rates.