What tightening supply, accelerating demographic demand, and shifting capital costs mean for valuations and deal flow heading into the next cycle.
A forward-looking guide for owners, operators, and investors, built on the latest published industry data from JLL, NIC MAP, CBRE, PwC/ULI, FHFA, and the U.S. Census Bureau.
Senior housing enters the 2026–2027 window from a position of strength. The sector posted its strongest transaction year in a decade in 2025, occupancy has recovered past pre-pandemic levels in most markets, and new construction has fallen to the lowest levels in more than fifteen years. At the same time, the oldest baby boomers turn 80 in 2026, the age at which demand for assisted living and memory care rises sharply.
Put simply: demand is accelerating while new supply is shrinking. Because a new community takes more than two years to build, almost nothing that could relieve that imbalance can open before mid-2028. That sets up 2026 and 2027 as a period in which well-run existing communities hold unusual pricing power, and in which buyers compete for a limited number of quality assets.
The single most important fact in this outlook is demographic. In 2026 the first baby boomers turn 80, and the U.S. Census Bureau projects the 80-and-older population will grow about 48% between 2025 and 2030. Everyone who will be 80 in 2030 is already alive today, which is why industry researchers treat this demand as a near-certainty rather than a forecast.
PwC/ULI's Emerging Trends in Real Estate identifies this aging wave as the defining structural force in senior housing for the coming decade. Through 2026 and 2027, the effect should show up as steadily rising inquiries, shorter lease-up periods for well-located communities, and stronger demand for higher-acuity care such as assisted living and memory care.
PwC/ULI projects that middle-income older adults will make up about 44% of all older-adult households by 2033. Most of today's product is priced for either the high end or Medicaid-supported care, leaving a large group under-served. Operators and developers who can deliver quality care at middle-market price points are likely to find the deepest pool of residents over the next cycle.
While demand climbs, new supply has nearly stalled. In NIC MAP's 31 primary markets, construction starts totaled just 1,076 units in Q3 2025, the lowest quarterly figure since 2009. Units under construction fell to roughly 19,500, the lowest level since 2013. JLL reports construction starts down 77% from recent peaks in primary markets and 62% in secondary markets, so the shortage is national, not regional.
Haven perspective: For 2026–2027, the supply side of the equation is largely locked in. New development financing remains difficult, and anything that starts today delivers into 2028 or later. That makes existing, licensed, operating communities the most direct way to capture near-term demand, and supports their value.
Occupancy has posted nineteen consecutive quarters of positive absorption since the pandemic. NIC MAP reported independent living at 90.2% in Q3 2025, above 90% for the first time since 2019, with assisted living at 87.2% and active adult at 92.1%. NIC projects industry-wide occupancy above 90% by the end of 2026, and with so little new supply arriving, there is little to push it back down in 2027.
| Indicator | Latest reading | 2026–2027 direction |
|---|---|---|
| Average monthly rent | $5,479, up 28.8% from pre-COVID (JLL, Q4 2025) | CBRE forecasts annual rent growth above 5% over the next 36 months; Harrison Street projects 3–6% for 2026 |
| Same-store asking rent growth | 4.3% annually; assisted living 4.4% (NIC MAP, Q3 2025) | Strongest in supply-constrained markets |
| Operating margins | Above 25% in mid-2025, highest since 2018; up 120 bps year over year (NIC MAP) | Supported by moderating labor and insurance costs |
| Occupancy | 89.9% primary / 90.0% secondary (JLL, Q4 2025) | NIC projects above 90% industry-wide by end of 2026 |
Expenses are also becoming more predictable. Reliance on agency staffing has declined and wage inflation has normalized from its 2022–2023 peaks (BLS Employment Cost Index), while insurance premium swings from 2023–2024 have eased in most markets (Marsh McLennan). For owners, the combination of rising rents and steadier costs is what is driving margin recovery.
Capital has returned decisively. Rolling four-quarter transaction volume reached $24 billion at the end of 2025, the highest level since 2015, and senior housing now accounts for a decade-high 16.2% share of all commercial real estate transaction volume (JLL, March 2026).
Cap rates have been compressing. CBRE's H2 2025 survey reported an average decline of 17 basis points in the second half of 2025, with independent living leading at 20 basis points. The spread between senior housing cap rates and the 10-year Treasury has narrowed to about 210 basis points, well below the sector's long-term average of 416 basis points.
A thinner spread tells us investors are pricing in future rent and occupancy growth rather than simply demanding a premium over bonds. That supports today's values, but it also means pricing is more sensitive to interest rates. If borrowing costs fall over 2026–2027, compression could continue; if rates rise, buyers will lean harder on underwriting growth, and spreads have less room to absorb the shock. Expanded agency (Fannie Mae and Freddie Mac) lending capacity is a meaningful support for financing stabilized assets through this period.
For owners considering a sale or recapitalization, 2026–2027 offers a combination that does not come often: rising operating performance, deep buyer interest, and limited competing supply. Practical steps:
Buyers face more competition for fewer quality assets. The opportunities most likely to stand out over the next two years:
Browse current opportunities on our listings map, or explore our complete guide to investing in assisted living facilities. For a deeper look at the data behind this outlook, see our Q1 2026 Senior Housing Market Report.
Haven's advisory team works with owners and investors across all 50 states. Confidential conversations on buying, selling, and capital strategy.
Talk to an Advisor Browse ListingsThis outlook summarizes published third-party research and Haven's perspective for general information. It is not investment, legal, or tax advice. Figures reflect the most recent data available from the cited sources at the time of writing.
