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Demand for senior housing enters 2026 with strong long-term prospects, with overall occupancy high and inventory growth low, per new reports from Partner Valuation Advisors and JLL.

By Julie Strupp Senior Editor via Multifamily dive.com <— Click here for more articles

Housing targeted to older adults saw strong performance in 2025 with rent growth and sustained absorption, and the sector is in a position of renewed strength this year, per a March report from Chicago-based real estate valuation firm Partner Valuation Advisors. 

“Medium and long‑term investment sentiment remains bullish as the industry prepares for the accelerating impact of a ‘Silver Stimulus,’” according to Partner Valuation Advisors.

Aging population and longer life expectancies in the U.S. are fueling demand for independent living, assisted living and memory care housing to manage complex and acute health care needs, per JLL’s Spring 2026 Seniors Housing and Care Investor Survey and Trends Outlook.

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“The U.S. 80+ population is projected to grow 36.6% over the next decade (compared to 5% total population growth), with over 10,000 Americans turning 65 daily, creating unprecedented long-term demand for seniors housing,” according to Chicago-based real estate firm JLL. “86% [of respondents] are seeking to increase their seniors housing exposure in 2026.” 

The senior housing sector is supported by durable demographic demand drivers, as well as improving economic conditions, according to the Partner Valuation Advisors report written by Senior Managing Director Brian Chandler.

“As Baby Boomers continue to age into higher‑acuity cohorts, demand and absorption are expected to remain elevated. With continued occupancy growth and construction activity still slow, demand is expected to continue outpacing new supply, supporting further occupancy and NOI growth,” according to the Partner Valuation Advisors report.

Economic trends in senior housing

Last year, demand for housing targeted to older adults accelerated “meaningfully” with improving fundamentals, 18 consecutive quarters of occupancy growth and the early stages of the aging demographic wave, per Partner Valuation Advisors.

Overall occupancy reached approximately 89% as of Q4 2025, the highest level in years. At the same time, new inventory growth declined to its lowest level since 2006, creating a pronounced supply-demand imbalance, according to Partner Valuation Advisors. As a result, annual rent growth pushed above 4%, driven by record absorption and increasingly constrained supply.

Although per-unit valuations in the multifamily sector have remained stable over the past year, housing targeted to older adults and nursing care prices have risen, according to JLL. In fact, senior housing rents grew 28.8% from pre-COVID levels to an average of $5,479 monthly.

This rent growth is expected to persist, with operating margins stabilizing and acquisition activity remaining robust, particularly for stabilized class A independent living, assisted living and memory care housing, according to the Partner Valuation Advisors report.

As transaction activity accelerated in the past year, investor confidence rebounded and capital markets improved materially, according to Partner Valuation Advisors. Debt availability also expanded, with traditional bank lenders re‑engaging the sector and supporting both refinancing and acquisitions.

“Following a record M&A year in 2025, transaction market liquidity continues to improve, and both equity and debt providers are expected to increase capital allocations to the sector in 2026,” according to Partner Valuation Advisors. “Capitalization rates appear to have leveled off and continue to show signs of compression, while pricing remains supported by values below replacement cost.”

Headwinds persist

Several challenges persist in the senior housing sector, however. New supply remains limited due to high construction costs and constrained capital availability, resulting in the lowest construction levels since 2012, per the Partner Valuation Advisors report. Labor expenses remain a key concern due to elevated turnover and overtime costs.