Growing demand from an aging population and increasing need for specialized care are driving strong growth in seniors housing and increasing capital inflows from equity and debt providers. According to IBISWorld, the U.S. Seniors Housing market, which includes independent living facilities, assisted living facilities, and continuing care retirement communities, is currently estimated at $60 billion. The Nursing Care market, defined as skilled nursing facilities, nursing homes, and hospice centers, is estimated at more than $128 billion. As the Baby Boomers are reaching the age of retirement, both of these sectors are projected to grow steadily over the next few decades.
The primary factor driving the demand for seniors housing and nursing care in the U.S. is the aging population. The number of people in the U.S. that will likely need some type of seniors housing is unprecedented.
U.S. Senior Population (in millions)
- Baby Boomers are turning 65 at a rate of more than 10,000 per day
- The 70+ population is expected to grow faster than any other age group - from 28 million in 2010 to 53 million by 2030
- The 85 and over population is projected to more than triple from 5.5 million in 2010 to 19 million by 2050
In addition to the sheer number of people aging, seniors are living longer due to healthier lifestyles and better access to healthcare. Life expectancy is now 79 years in the U.S. and continues to rise. Other factors contributing to high demand for seniors housing and nursing care include increased market penetration, product acceptance, prosperity of adult children, and a decline in the number of potential caregivers. As new seniors housing developments emerge, more seniors and their family members have become aware of the options available to them. Awareness has also grown due to increased advertising and a wealth of information available on the Internet. As key decision makers for their elderly parents, adult children have given rise to the demand for quality seniors housing as a large percentage of this group has prospered in recent years. Lastly, the number of caregivers or supporters for the elderly is declining. In 2010, the elderly support ratio (potential caregivers aged 20 to 64 for each person 65 and older) was approximately 5 to 1. By 2030, that ratio is projected to have dropped below 3 to 1.
The seniors housing sector will continue to benefit from growing demand, availability of capital, low interest rates, and strong investor appetite. Industry operating fundamentals remain strong and the capital markets continue to provide debt and equity to those wishing to acquire or build.