Why Seniors Are Buying Retirement Homes Before They Need Them

April 25, 2025

Senior Housing Shortage Triggers Early Purchase Trend

A severe senior housing shortage first reported by MarketWatch is driving older adults to secure spots in retirement communities years before they actually need them. This unprecedented pre-purchasing trend signals a deepening crisis as America's aging population confronts limited housing options.

Bottom line: 

Seniors and their families need to plan much earlier for housing transitions, potentially considering locations outside preferred areas. Without accelerated development, families will face increasingly difficult choices between scarce professional facilities and home-based care that often places significant burdens on family caregivers.

Critical Supply-Demand Imbalance Revealed

The numbers paint a concerning picture for the senior housing market:

  • 564,000 new senior housing units needed by 2030 to meet demand

  • Only 191,000 units projected to be added at current development rates

  • The number of Americans over 80 will surge from 14.7 million today to 18.8 million by 2030

  • The average age for entering senior living facilities is 84

Despite record-high occupancy levels in Q1 2025, with nearly 621,000 units filled nationwide, construction starts hit their lowest point since 2009, with just 1,076 units breaking ground, according to NIC MAP data.

High Costs and Labor Challenges Stifle Construction

"Due to COVID-era interest-rate spikes, we're not producing senior housing at the pace needed. We can't build fast enough," explains Dwayne Clark, CEO of Aegis Living. "It takes five or six years from finding a site to opening a building."

Multiple factors are hampering new development:

  • Construction loan rates double pre-COVID levels

  • Rising material costs due to tariffs

  • Potential workforce disruptions affecting labor supply

Regional Variations in Occupancy

The crisis isn't uniform across the country. Four markets now exceed 90% occupancy, led by Boston (90.7%), Baltimore (90.6%), and Cincinnati (90.2%). Meanwhile, Miami (84.7%), Houston (84.7%), and Atlanta (83.9%) offer slightly more availability.

With new construction at a standstill, industry experts predict strategic acquisitions of existing facilities will dominate, with companies like Welltower leading the charge with over $20 billion in real estate acquisitions since 2020.

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