Senior Living Construction Costs Could Rise 4% To 6% In Next 12 Months

Senior living construction costs are still rising, but several factors could help moderate those cost increases in 2025.

Construction firm The Weitz Company is anticipating a 4% to 6% increase in construction costs over the next year, signaling “the need for strategic planning and cost control as the market continues to shift,” according to a Weitz construction costs brief, released April 21.

According to the report, construction costs for independent living range from $239 to $290 per square foot for mid-level projects, while high-level projects range from $282 to $361 per square foot. Assisted living projects range in cost from $278 to $354 per square foot and $263 to $322 per square foot for mid-level and high-level projects respectively.

Projects including under building parking can expect construction costs to range from $152 to $188 per square foot for mid-level projects, while high-level ranges from $190 to $238 per square foot, according to the report.

Although the latest prices reflect how construction costs are still rising, concerns regarding a recession, slower economic growth and elevated interest rates are prompting more hesitation among lenders. That could keep costs from escalating too severely in the months ahead as demand for commercial construction wanes.

Tariffs will likely have an immediate effect on developers across a variety of goods, along with increasing the difficulties of projects’ ability to underwrite.

For the time being, developers will likely remain in a holding pattern until they are more certain about the market, Larry Graeve, senior vice president of Weitz, told Senior Housing News.

“Projects that have a two- to three-year runway before construction start are still moving forward, albeit with a close eye on the market,” Graeve told Senior Housing News. “In the coming months, it’s unknown what will happen. It really depends on if tariffs take hold and for how long.”

Rate cuts from the Federal Reserve are unlikely in the near term as supply chain disruptions, and potential new tariffs cloud future certainty, according to the report.

The announcement comes at a time when new construction developments have stalled within the senior living industry to some of the lowest numbers seen in over a decade. As of the first quarter of 2025, only 1,076 units were added, the lowest amount since 2009.

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