From McKnight’s Senior Living — By Kimberly Bonvissuto —
Although challenges persist in the US construction market, the long-term outlook for senior living suggests a return to growth, driven by infrastructure investment, an easing of monetary policy and a gradual stabilization of material costs, according to a new special issue brief prepared by The Weitz Company for the American Seniors Housing Association.
Pointing out that the US construction sector experienced a “notable” slowdown in the first half of 2025 due to “persistent economic uncertainty,” Weitz said that activity across both residential and nonresidential markets declined amid increasing costs and cautious investor sentiment.
On top of those headwinds, project timelines and budgets on existing projects could be strained as unemployment in the construction market is hovering near a 20-year low at 3.4%, the company said. The industry is facing a shortfall of 400,000 workers to meet existing project backlogs.
ASHA President and CEO Dave Schless told McKnight’s Senior Living that the Weitz construction cost data help frame the environment facing those who develop senior living communities.
“Their most recent report underscores the challenges of making new construction ‘pencil out’ despite the rapid growth of the 80-plus population and improved occupancy across all sectors in the industry,” Schless said.
Looking ahead, construction inflation is projected to increase as the effects of tariffs and labor shortages “ripple through the supply chain.” According to the brief, inflation is expected to be between 2% and 3% for the remainder of the year, with a sharp increase to 4% to 7% anticipated in 2026 as project volume rebounds and cost pressures mount.
Based on a city index of 100, according to Weitz, assisted living construction costs per gross square foot range from $278 to $354 at the mid-level and $363 and $452 at the high level. Independent living costs per gross square foot range from $240 to $291 at the mid level and $283 to $362 at the high level. This compares with skilled nursing costs of $315 to $373 at the mid level and $393 and $505 at the high level.
Mid-level projects generally have wood-framed construction and standard amenities and finishes, whereas high-level programs generally are of steel or concrete construction and have luxury amenities and finishes.