Senior Living Construction Costs Still Rising Even As New-builds Remain Low

The cost of senior living construction projects is slowly rising even amid a historic low for industry construction starts.

According to the latest seasonal construction market report from The Weitz Company, prices ticked up only slightly since earlier this year.

The report indicates the costs of construction for senior living projects have seen increases over the past quarter, with mid-level independent living projects costing between $240 and $291 per square foot and high-level projects costing between $283 and $362 per square foot, up $1 since the previous report. Mid-level assisted living projects saw a slight decrease at $278 to $354 per square foot, while high-level saw an increased range from $363 to $452 per square foot.

Projects with under building parking are currently ranging from $152 to $189 per square foot at the mid-level and $191 to $239 per square foot at the high level.

Residential and nonresidential construction activity has decelerated “amid rising costs and cautious investor sentiment,” the report’s authors noted while citing data from the Dodge Construction Network.

Construction unemployment rates are nearing a 20-year low at 3.4%, with a shortfall of 400,000 workers to meet existing project backlogs. The Federal Reserve did not raise interest rates during its latest committee meeting, and interest rates have presented a barrier to obtaining new lending for construction. But even if interest rates fall, pent-up demand for new projects could increase competition for skilled labor and strain project timelines and budgets, according to Weitz.

Tariffs have at least stabilized the price of imported steel, but Weitz noted industry-watchers are still concerned about the possibility of future price hikes. Pre-tariff lumber stockpiling has temporarily led to a price floor for those products.

“However, the drag from slower housing demand and higher carrying costs appears to outweigh inventory replenishment, leaving the market in a delicate balance between supply restraint and cooled consumption,” the report’s authors wrote.

Current tariffs and cost inflation of certain construction goods will “ripple through the supply chain” and push prices 2% to 3% for the remainder of 2025. Weitz also expects a “sharper increase” of 4% to 7% in 2026 due to project volume rebounds and cost pressures.

“While challenges remain, the long-term outlook suggests a return to growth—driven by infrastructure investment, easing monetary policy and a gradual stabilization of material costs,” the report’s authors wrote.

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