Senior Housing's Recovery Slowed by Supply Growth, but Demand Should Outpace Supply Over Next Decade

After seeing significant occupancy declines in 2020 due to pressures created by the coronavirus pandemic, occupancy in the senior housing industry has steadily recovered over the past two years. Senior housing fell from around 88% at the end of 2019 to a low point around 79% in the first quarter of 2021, but that figure has since recovered to 83% as of the end of 2022. Industry utilization has fully recovered to prepandemic levels with approximately 7.5% of all the over 80 population in the US living in a senior housing facility as of the end of 2022 despite dipping to 7.0% at the nadir of the pandemic. Therefore, the reason occupancy has not fully recovered to prepandemic levels is due to continued supply growth, with newly developed buildings contributing 3% additional units per year in 2020 and 2021 despite the decline in demand those years.