1

The recovery of the seniors housing sector's fundamentals continued through much of 2022. Although seniors 

housing occupancy rates have not fully recovered to pre-pandemic levels, according to data from NIC MAP Vision 

LLC, occupancy rates for seniors housing increased in 2022 and the industry achieved its highest number of 

occupied units on record as of the fourth quarter. Rent growth rates reached historical highs later in the year, with 

absorption robust for most of the year after an early stumble.

The rise in interest rates and financing costs in the second half of 2022, as well as inflation and a significant rise in 

staffing costs, negatively impacted the industry’s financial performance during the year, while, in contrast, the 

fundamental demand environment remained strong. In addition, there continues to be a wider range of propertylevel rent growth and occupancy than there was before the pandemic. But in the second half of 2022, the industry 

experienced remarkable rent growth and high levels of absorption, continuing a recovery that was briefly 

interrupted in late 2021 through early 2022 when an enormous wave of COVID-19 Omicron variant infections 

temporarily paused new residents from moving into seniors housing facilities. With a recession still expected in 

2023, as well as a slowing of home sales, we expect the seniors housing sector will face headwinds in 2023, but we 

still expect a continued expansion in the sector over the longer term.

Multifamily Economic and Market Commentary

MARCH 2023

Seniors Housing Sector Fundamental Recovery Continued in 2022, Although Sector Faces Headwinds

Rental Market Fundamentals

According to NIC MAP Vision, annual rent growth 

for seniors housing reached a new quarterly 

record in the fourth quarter of 2022, increasing 

2.2 percentage points from 2021 to 4.9% for the 

year. The underlying segment trends continued 

to be similar, and both achieved new annual 

records: Majority Independent Living (IL) 

increased 2.1 percentage points from 2021 to 

4.5% for 2022, and Majority Assisted Living (AL) 

increased 3.4 percentage points to 5.5% for the 

year. 

Overall, seniors housing absorption continued to 

be robust during late 2022, with the level rising 

to 8,631 units for the fourth quarter, the thirdhighest level on record. The underlying segments 

had slightly different underlying trends: Majority 

IL absorption again rose to its second-highest 

level on record to 4,180 units, while Majority AL 

saw a slight easing to 4,451 units.

Occupancy rates for seniors housing increased in 

2022, though the measures overall remained 

below pre-pandemic peaks. Occupancy rose to 

83.0% at the end of 2022, improving 2.8 

percentage points from the prior year. 

Underlying segment trends were generally 

consistent: Majority AL increased 3.8 percentage 

points to 80.7%, and Majority IL increased 2.0 

percentage points to 85.2%.

70%

80%

90%

Occupancy Levels by Property Type – Q4 2022

Seniors Housing Majority Independent Living Majority Assisted Living

0%

5%

Year-over-Year Rent Growth by Property Type – Q4 2022

Seniors Housing Majority Independent Living Majority Assisted Living

-10,000

-5,000

0

5,000

10,000

Quarterly Absorption by Property Type – Q4 2022

Majority Independent Living Majority Assisted Living

Source: Primary Markets, NIC MAP Data, Powered by NIC MAP Vision LLC
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Multifamily Economic and Market Commentary

The number of seniors housing units 

under construction continued to ease 

throughout 2022, declining to 35,719 as of 

year-end. The total number of units under 

construction is down 7.5% from 2021. 

Both segments decreased compared to 

2021, with the scale of the decline 

somewhat diverging: The number of AL 

units under construction is down 9.6% 

compared to 2021, while IL units are down 

5.0%. The overall number of units added 

to the seniors housing inventory in 2022 

decreased to 10,992 units, down from 

15,808 units added in the prior year.

0

10,000

20,000

30,000

40,000

50,000

60,000

Units Under Construction by Property Type – Q4 2022

Majority Independent Living Majority Assisted Living Seniors Housing

Transaction Activity

According to NIC MAP Vision, total seniors housing property sales in 2022 are estimated to have totaled $5.9 

billion, down significantly from $13.9 billion for 2021. Sales volume declined over the course of the year, and 

fourth quarter 2022 sales volume is estimated to have decreased to its lowest level since Q3 2009 at $216 million, 

down from $1.3 billion in third quarter 2022 and $3.5 billion in the fourth quarter of 2021.

The preliminary seniors housing annual average capitalization rate increased to 8.4% in fourth quarter 2022, up 

from a revised 7.4% for the year ending third quarter 2022 and up from 8.0% for 2021. It is important to note that 

these cap rates can be volatile and are often significantly revised as more data is gathered, sometimes months 

after the close of the transactions. On a very limited number of deals, the average transaction price per unit during 

fourth quarter 2022 declined to $139,545. Although that was up 9% from 2021, it was still lower than the prepandemic price per unit of $168,442 in fourth quarter 2019. 

Buyer composition shifted significantly toward private entities in 2022, with the share rising to 80% of 

transactions, up from 53% for 2021. Public buyers represented just 8% of transactions, down from 29% for 

2021. Institutional buyers were down modestly at 11% for 2022, compared to 13% in 2021. Cross-border 

buyers accounted for less than 1% of 2022 activity, down from 4% in 2021. 

Source: NIC MAP Vision

4%

5%

6%

7%

8%

9%

10%

Four Quarter Cap Rate/Yield – Q4 2022

$0

$1

$2

$3

$4

$5

$6

$7

$8

Billions

Sales Volume – Q4 2022

Source: NIC MAP Vision
0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Rent Growth - Primary vs. Secondary – Q4 2022

Primary Markets Secondary Markets

3

Multifamily Economic and Market Commentary

Market Performance

According to NIC MAP Vision, occupancy levels in secondary markets (32nd to 100th in size) rose to 84.9% at the 

end of 2022, a 2.9 percentage point increase from 2021. Annual rent growth in the secondary markets continued 

to rise throughout 2022, increasing to 4.8% for the fourth quarter, which was the highest level on record. 

Compared to 2021, annual rent growth rose slightly higher in the primary markets: rent growth was up 2.2% in 

the primaries, compared to 2.0% in the secondaries. 

77%

82%

87%

92%

Occupancy - Primary vs. Secondary – Q4 2022

Primary Markets Secondary Markets

Source: NIC MAP Vision

0%

5%

10%

15%

20%

25%

30%

Select Metro AL Vacancy – 2018-2022

2018 2019 2020 2021 2022

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

Select Metro AL Rent Growth – 2018-2022

2018 2019 2020 2021 2022

According to data from Moody’s Analytics CRE, majority AL conditions continued to recover for most of the 

nation’s larger inventory AL metros. Among these metros, all had positive rent growth in 2022. Las Vegas, RaleighDurham, and Boise were again rent growth leaders, as they were in 2021, with Fort Myers and Orlando following. 

All but Boise experienced an increase in rent growth compared to 2021. While Fairfield, CT, Scranton, Cleveland, 

Long Island, and Rochester lagged the market from a rent growth perspective and showed slower rent growth in 

2022 than in 2021, all of them still reported positive rent growth for 2022, as seen in the chart below.

From a vacancy perspective, 79 of the 82 largest markets in the country experienced a decrease in vacancy rates in 

2022, according to Moody’s Analytics CRE. And all of the metros among the five highest and lowest vacancy rates 

in 2022 saw a decline compared to 2021, as seen in the chart below. Hartford and Miami were again among the 

five lowest vacancy rate markets for AL properties, with San Francisco, Buffalo, and Omaha joining them in 2022. 

Columbia, SC, Dallas, Appleton, WI, and Detroit were among the higher vacancy rate markets in 2021, with 

Daytona, FL joining them in 2022.

Metro-Level Assisted Living Performance Continues to Recover

Source: Moody’s Analytics CRE – select metros include areas with > 1,500 AL units in market
4

Multifamily Economic and Market Commentary

Outlook

In 2022, the seniors housing sector continued recovering, seeing noteworthy levels of demand that arrived after 

the depths of the pandemic. The total number of occupied units in the industry achieved a new record at the end 

of the year, and although the occupancy rate improved throughout most of 2022, it is still below pre-pandemic 

levels. Rent growth reported several quarterly records, which is further evidence of significant demand. We 

believe a potential headwind for the industry in 2023, however, could be seniors’ reluctance to sell their current 

homes in light of uncertain home prices and higher mortgage rates. Additionally, individual property financial 

performance may continue to be held back by a mix of higher operating costs and higher financing costs that are 

still present in today’s environment.

The burgeoning population of people entering their 80s remains the underlying engine of the sector’s future 

growth prospects, although we are still years away from seeing the full strength of that surge. We believe the 

sector is experiencing a recovery, and in several years it could be entering some of its strongest-ever years of 

demand. But it must navigate the next several quarters years of potential economic volatility (and the resulting 

uncertainty from higher operating and financing costs) before a long-term industry expansion is more firmly 

entrenched.

Multifamily Economic and Market Commentary

Metro-Level Independent Living Performance Eased Slightly

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

Select Metro IL Rent Growth – 2018-2022

2018 2019 2020 2021 2022

Source: Moody’s Analytics CRE – select metros include areas with > 1,500 IL units in market

0%

5%

10%

15%

20%

25%

30%

Select Metro IL Vacancy – 2018-2022

2018 2019 2020 2021 2022

Majority IL rent growth rates in 2022 increased in 71 of the nation’s 86 highest inventory IL metros, according to 

data from Moody’s Analytics CRE, which is a slight decline from 2021 when just one of the largest markets slowed. 

Raleigh-Durham reported the highest IL rent growth rate in 2022, followed by Boise. Springfield, MO, Fort Myers, 

and Orlando were the other Majority IL rent growth leaders, with each reporting substantial growth over 2021. 

Among the slower metros, all reported a decline compared to 2021, though none of them were among the lowest 

the prior year.

Majority IL vacancy decreased in 77 of the 86 largest markets in the country, though several of the lagging markets 

continued to have a remarkably high level of vacancy of over 20%. Richmond, San Jose, San Francisco, Boise, and 

Baltimore ended the year with vacancy under 10%, though Boise had a modest increase during the year, as seen 

in the chart below. Among the markets with the highest IL vacancy rates, Charleston, SC, Fairfield, CT, and 

Louisville reported a decline in vacancy compared to 2021, but San Antonio and Omaha each reported increases 

for 2022.
Multifamily Economic and Market Commentary

5

Tim Komosa

Economist - Senior Manager

Multifamily Economics and Research

March 2023

Opinions, analyses, estimates, forecasts, and other views of Fannie Mae’s Economic and 

Strategic Research (ESR) Group included in these materials should not be construed as 

indicating Fannie Mae’s business prospects or expected results, are based on a number of 

assumptions, and are subject to change without notice. How this information affects Fannie 

Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, 

estimates, forecasts, and other views on information it considers reliable, it does not 

guarantee that the information provided in these materials is accurate, current, or suitable 

for any particular purpose. Changes in the assumptions or the information underlying these 

views could produce materially different results. The analyses, opinions, estimates, 

forecasts, and other views published by the ESR Group represent the views of that group as 

of the date indicated and do not necessarily represent the views of Fannie Mae or its 

management.