Assisted Living Facilities NAICS 623312

May 15, 2025 - Supply Growth Decreases

• Senior living advocacy group LeadingAge has expressed concerns about a 26% cut in discretionary funding for the Department of Health and Human Services that was proposed in the 2026 fiscal year budget plan released by the White House in early May. Concerns include $1.7 billion in cuts to programs that formerly were part of the Health Resources and Services Administration; a $3.6 billion cut in discretionary funding for the Centers for Disease Control and Prevention; a $674 million reduction for the Centers for Medicare & Medicaid Services; and a $4.1 billion cut from the Low-Income Home Energy Assistance Program, which helps low-income Americans pay their heating and cooling bills. “The administration’s request removes the ‘draft’ stamp from the damaging Department of Health and Human Services leaked budget mid-April and solidly calls into question how our federal health agency can cut more than 26% of its funding without harming older adults and the providers who serve them,” LeadingAge Senior Vice President of Policy Linda Couch told McKnight’s Senior Living.
• Supply growth of senior living beds is decreasing, according to Lisa McCracken, head of research and analytics at the National Investment Center for Seniors Housing & Care. The decrease is occurring as the industry experiences the arrival of the “silver wave” of baby boomers. The oldest boomers are turning 79 in 2025 and the youngest are turning 61. "What’s interesting is, we did not predict that we would be in this spot of the demographic wave coupled by an environment where our ability to grow is really stymied by the economic environment,” McCracken said. Providers are still feeling some effects from the pandemic, “and we anticipate some of that’s still going to be with us for a period of time,” she added.

• The threat of capital gains taxes is leading older homeowners to keep their homes rather consider a move to a senior living community, according to a report from CareLogic. Homeowners can exclude housing capital gains for up to $500,000 — or $250,000 for single households — from the sale of their homes thanks to the Taxpayer Relief Act, but increasing home prices have caused almost 8% of US homes sold in 2023 to exceed that limit, leaving homeowners liable for capital gains beyond the limits.
• Assisted living industry employment increased slightly during the first three months of 2025, according to the US Bureau of Labor Statistics. Nursing and residential care industry revenue increased 8.7% year over year and 4.5% quarter over quarter during the fourth quarter of 2024, according to the US Census Bureau. Assisted living facilities sales are forecast to increase at a 4.73% compounded annual rate from 2025 to 2029, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc.