Annual senior living costs, including those associated with independent living, assisted living and memory care, increased 2.7% from 2014 to 2016, according to new data released by senior living referral service A Place for Mom.
The increase means that, at median, older adults are paying $1,188 more per year than they were two years ago. Part of the reason for the cost increase, according to A Place for Mom, may be that older adults are waiting longer to move into senior living communities, meaning that they have more expensive housing and care needs once they make the transition. The percentage of people aged 84 or more years moving into senior living increased by 3% between 2013 and 2015.
Despite the increase, it’s a good time for older adults to consider a move to senior living, Charlie Severn, vice president of brand marketing for A Place for Mom, told McKnight’s Senior Living.
“The growth rate of senior living, at 2.7%, is just a little above the inflation rate, which I think is good news, especially if you compare it to the housing market, which is now trending at 7%,” he said.
Data from A Place for Mom’s National Senior Living Cost Index are based on a representative sample of the company’s overall referrals for families, focusing on monthly rent and care data collected for more than 10,000 senior living communities over the five-year tracking period.
- Regions. Those living in the South and West saw the greatest growth in costs, at 4% and 2.7%, respectively, translating to annual cost increases of $1,500 and $1,080. The recession hit hardest in those regions, which saw the biggest downturn in property values. “In the case of the South, perhaps internal migration patterns, state to state migration, may account as well for the fact that it posts 4% growth, which is the highest year-over-year growth of all of the regions in 2015,” Ben Hanowell, a data scientist at A Place for Mom, told McKnight’s Senior Living.
- Cities. Washington, Boston and New York are the top three most expensive metros for senior living. Senior living costs vary in predictable ways within metros, as well. For example, median monthly assisted living costs in Manhattan ($5,500 in 2014 and 2015) are 9% higher than the metro median, whereas costs in the Bronx ($4,200) are 15% lower in comparison. Hanowell said he was surprised that costs in some urban centers are less than their greater metropolitan areas, whereas other cities are more expensive than their greater metropolitan areas. “For example, I was not expecting that San Francisco would be slightly cheaper than its surrounding metropolitan area, whereas a place like New York is much more expensive than the surrounding metropolitan area,” he said.
- Categories. Data show that independent living communities were hardest hit by the recession, with costs increasing 3%, most likely because older adults delayed selling their homes to prevent losing money on their real estate investments. Memory care, on the other hand, proved most resilient to the recession, and A Place for Mom speculates that it’s due to the fact that it’s more difficult to delay a move to such housing. In that category, growth was 0.8% year over year since 2012.
Information from the National Senior Living Cost Index is now available to consumers to help them plan for future senior living costs. Visitors to A Place for Mom’s website can map and rank senior living costs by county, state and region, as well as to see year-over-year and multi-year trends in senior living costs.
Even though the index is designed for consumers, providers ultimately benefit, Severn said. “We talk to thousands of consumers every day, and many of them are unprepared in understanding what the true costs are or understanding the types of care that are available. Anything that we can do as an industry to help educate consumers on those two things is a good thing for our partners.” Providers also can use the index to compare costs of their communities versus communities in their own geographical area, he added.
See the slideshow for additional information.