In the last five years, Nebraska’s housing market experienced significant changes—especially impacting families earning under $250,000 annually. This group represents most households statewide, where median earnings are about $72,000. Over these five years, Nebraskans navigated rapidly rising home prices, a pandemic-driven buying surge, and then a cooling market influenced by climbing interest rates. Buyers adjusted their choices, financing methods, and preferred locations in response to these shifting conditions, shaping the state’s real estate landscape.
Types of Homes Purchased
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Single-Family Dominance
For households under $250,000 income, the typical home purchased was a single-family house with 2–4 bedrooms. Nebraska’s housing stock is dominated by detached single-family homes – about 70–75% of homes fall in this category. As of 2020, the median single-family house size in Nebraska was about 2,300 square feet, indicating many homes are reasonably spacious.
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Age and Condition Variations
Home age and condition varied widely between urban and rural areas. In cities and suburbs, houses bought were often built in recent decades or around the mid-20th century, typically in good condition or needing only minor updates.
In rural parts of Nebraska, much of the housing is older. For example:
- In North Platte, 55% of housing units were built before 1970
- In Nebraska City, about 61% of homes predate 1970
- In Stuart, 68% of homes were built before 1970
Rural buyers often purchased older houses, some needing significant repairs. In North Platte, local officials noted about half the homes on the market needed “substantial work” after purchase.
New vs. Existing Homes
The majority of homes bought by this income group were existing homes rather than new constructions. New construction in Nebraska slowed significantly after the 2008 housing crash – only about 46,000 homes were built in the entire state during 2010–2019, less than half the number built in the decade prior.
This construction slowdown meant fewer new houses available for sale, especially in small towns. By the 2020s, building activity increased but was still playing catch-up. In late 2021, building permits for single-family homes reached multi-year highs, yet overall supply of new homes remained inadequate.
Even in major markets like Omaha and Lincoln, new homes often came at a premium price due to high construction costs, which jumped approximately 15% in 2021 alone.
Where People Are Buying: Urban vs. Rural Patterns
Urban Areas
A large share of home purchases occurred in Nebraska’s cities, primarily the Omaha metro area and Lincoln. During the pandemic boom of 2020–2021, home prices in these areas jumped by over 10% in many neighborhoods.
Douglas County (Omaha) and Lancaster County (Lincoln) each experienced double-digit percentage increases in home values from January 2020 to late 2021. Buyers in these cities tended to purchase in suburban neighborhoods or established city subdivisions.
Sarpy County (a suburban county by Omaha) had one of the lowest housing vacancy rates in the state at about 4% – nearly every house that came on the market was quickly purchased. In 2021, homes in Omaha often sold within days of listing, and well-priced homes frequently received multiple offers.
Rural Areas and Small Towns
Outside the major metros, Nebraska’s rural counties present a mixed picture. While many rural counties have high housing vacancy percentages, usable housing for sale was extremely scarce in many small communities.
In the most in-demand rural counties, the share of homes listed for sale was under 2% of housing stock. For instance, Nebraska City (population ~7,200) had only seven houses on the market at the start of February 2022, ranging from entry-level houses under $100,000 to others near $500,000, with almost nothing in between.
In some rural towns, housing shortages reached crisis levels. Some communities “haven’t built a new house in 15 or 20 years,” according to the director of Nebraska’s housing agency. Towns like Stuart went the entire 2010s without any new homes built.
Local employers in small towns sometimes resorted to buying houses whenever they hit the market just to offer them to new workers moving in – an attempt to tackle the “nowhere to live” problem that kept some jobs unfilled.
Regional Differences
Eastern Nebraska (around Omaha, Lincoln, and the I-80 corridor) saw the hottest market, with the most new development and fastest price gains. Central Nebraska cities like Grand Island, Kearney, and Columbus experienced more modest growth.
Even in western Nebraska (the Panhandle region), many areas saw prices rise in 2020–2022. The home price surge during the pandemic was widespread across the state – even parts of northwest and northeast Nebraska saw home values jump more than 10% over roughly two years.
Moving Patterns: Upsizing, Downsizing, or Staying Put?
From 2018 to 2023, many Nebraska homeowners stayed in their homes longer than in past decades, while those who did move were often upsizing to larger homes.
For those who moved within Nebraska, the most common reason was wanting more space or a better house. According to survey data, 71% of Nebraskans who moved within their county in 2022 cited “wanting new or better housing” as the main motivation.
Downsizing was less common than expected, partly because many older homeowners chose to “age in place” rather than sell and move. Nationally, baby boomers have increasingly held onto their houses instead of downsizing, reducing the number of homes on the market.
Another trend that emerged strongly in 2021–2023 was homeowners staying put due to low interest rates. Many people refinanced or bought homes at historically low rates (~3%) during 2020–2021. Once rates increased later, those owners became reluctant to sell their home and give up their advantageous mortgage.
By 2022–2023, this effect led to a kind of gridlock: many potential move-up buyers chose to stay in place, since selling and buying again would mean paying far more for the same mortgage amount.
Financing Methods
Conventional Loans
Conventional mortgages made up a significant share of home loans, especially for buyers with solid credit and some savings. According to industry data, the average loan amount in Nebraska with private mortgage insurance was about $226,000, suggesting many buyers were putting 5–15% down and financing the rest conventionally with PMI.
Conventional loans were popular for move-up buyers who sold one house and bought another, using their equity as down payment on the next home.
Government-Backed Loans
FHA loans were critical for many first-time and moderate-income buyers, allowing down payments as low as 3.5%. Nationally, FHA had a record year in 2021, insuring about 716,000 first-time buyers (around 85% of its purchase loans).
VA loans played an important role for Nebraska’s veterans and active-duty military families, particularly around Offutt Air Force Base near Omaha. These loans require no down payment and often come with slightly lower interest rates than conventional loans.
USDA Rural Development loans were especially important in Nebraska’s many rural communities, offering zero down payment for buyers in qualifying rural areas (which covers most of Nebraska outside the Omaha and Lincoln metro zones). For families buying in small towns or rural areas, USDA loans were often the best financing option available.
Influence of Interest Rate Shifts
Interest rates on home mortgages fluctuated dramatically over this period. In 2018, rates were around 4.5% to 5% for a 30-year fixed loan. By the end of 2019, they had dipped to closer to 3.7–4%.
When the COVID-19 pandemic hit in 2020, the Federal Reserve slashed rates, and mortgage rates plummeted. By early 2021, the average 30-year fixed rate hit historic lows – around 2.65% at one point, the lowest ever recorded in U.S. history. Throughout 2020 and 2021, rates mostly hovered in the high-2% to low-3% range.
This super-low rate environment supercharged homebuying demand. For example, at 3% interest, the monthly payment on a $250,000 loan is roughly the same as the payment on a $200,000 loan would be at 5% interest. With cheaper borrowing costs, Nebraska families felt confident stretching their budgets.
The tide turned in 2022. As inflation picked up, the Federal Reserve started raising interest rates sharply. By the spring of 2022, the 30-year rate was around 5%. By the end of 2022, it averaged about 5.34% for the year. In 2023, rates went even higher, at times reaching 7% or above, briefly hitting about 8% in October 2023 – the highest in two decades.
This rapid rise had a chilling effect on the market. Many prospective buyers in Nebraska had to lower their price range or pause their home search. A $1,200 monthly principal-and-interest payment could finance roughly a $250,000 loan at 3%, but the same $1,200 only covered about a $180,000 loan at 7%.
Buyer Behavior During and After the Pandemic
Pandemic Boom (2020–2021)
During the early pandemic, several factors converged: lifestyle needs changed, interest rates dropped, and there was a sudden surge of demand for housing.
With many people suddenly able to work from home, space became a premium. Nebraskans living in apartments or smaller homes started looking for larger places where they could have a home office, more privacy, or simply more room.
The demand for homes in 2020 and 2021 was so high that supply couldn’t keep up. The state entered 2021 with record-low inventory of homes for sale – as of October 2021, the number of homes on the market in Nebraska was the lowest in at least a decade.
Another trend was people moving to Nebraska from out of state or from larger metros, attracted by the relatively affordable housing. Some city dwellers moved to more rural areas or lake communities for more space since they could work remotely.
Post-Pandemic Trends (2022–2023)
After the initial pandemic waves, some behaviors normalized while others persisted. The preference for more space remained even after offices and schools reopened, as many Nebraskans retained flexible or hybrid work arrangements.
What changed was the level of urgency. As interest rates climbed and the pandemic housing frenzy cooled, buyers became more cautious and deliberate. By 2023, buyers could take more time, perhaps see a house more than once, and sometimes negotiate on price or get seller concessions – practices that were rare during the height of the boom.
There were also fewer speculative or “investor” buyers in the market by 2022–2023. During 2021, some investors or house flippers entered the market because home values were rising so rapidly. But when rates went up and price growth slowed, many of those non-resident buyers pulled back.
By 2023, with high interest rates, some potential first-time buyers chose to continue renting in the short term, hoping for either home prices or interest costs to decrease. Nevertheless, Nebraska’s homeownership rate remained quite high (around 69–70%), indicating that despite challenges, a majority of households either already owned or managed to buy homes during this period.
Home Price Trends and Affordability
Housing prices in Nebraska climbed significantly from 2018 to 2023. In 2018, Nebraska homes were quite affordable by national standards – the median home price was around the mid-$100,000s. Over the next five years, prices rose to the mid-$200,000s.
The median home value in Nebraska surpassed $200,000 for the first time in March 2021. By June 2022, the median sale price had reached about $270,000. It fluctuated around the mid-$260s to low-$270s through 2023.
From the start of 2020 to October 2021 alone, the median value of single-family homes in Nebraska shot up by 26%. This was unprecedented compared to previous periods – in the entire five-year period from 2015 to 2019, home values increased at a much slower rate.
The rapid rise in prices directly impacted affordability. During 2020 and 2021, the ratio of income to home price in Nebraska fell to 0.28 on average, meaning median income was 28% of the median home value. This ratio had been higher in previous years, indicating better affordability.
The affordability challenge was most severe for low-income communities. In Nebraska’s lowest-income neighborhoods, home prices rose much faster than local incomes. Over the past decade, the ratio of income to home price in the poorest communities fell from approximately 0.60 to 0.30.
By 2022, in Lincoln, more than 25% of households and nearly half of renters were spending over 30% of income on housing – meeting the definition of “cost-burdened.”
Comparing 2018–2023 with 2008–2017
The two periods were quite different for Nebraska homebuyers. The earlier span included the aftermath of the 2008 housing crash and a slow recovery, while 2018–2023 included a boom and a sudden cooldown.
From 2008 to 2017, Nebraska’s home prices rose modestly. The period saw a slowdown following the national housing bubble burst, with home values flat or slightly declining around 2009–2011. Real estate activity picked up around 2012 onward, with prices rising at a healthy single-digit percentage rate each year.
In contrast, 2018–2023 saw much sharper price increases, especially mid-period. The pandemic-era spike had no parallel in 2008–2017. In the five years after the Great Recession (2010–2014), Nebraska home prices barely rose (0-5% total growth), whereas in the five years around the pandemic boom, prices jumped dramatically (over 30% growth in 2015–2019 and an additional 20%+ in just 2020–2021).
Housing supply also differed markedly between periods. The 2008–2017 period was marked by an overhang of supply early on and then under-building later. By the mid-2010s, inventory was tightening but not alarmingly so – it was a balanced market in many Nebraska cities.
In contrast, 2018–2023 began already tight on supply and became outright scarce by 2020–2022. By 2023, Nebraska had roughly a one-month supply of homes for sale, whereas a “healthy” market is often considered 4–6 months of supply.
In summary, 2008–2017 was a buyer’s market to balanced market with moderate prices and ample choices, whereas 2018–2023 was largely a seller’s market with rapid price escalation and scarce inventory.
References
- Nebraska Home Prices Surging Amid Strong Demand and Limited Supply – Federal Reserve Bank of Kansas City
- Rural Nebraska’s Housing Crunch is Costing Towns New Residents Who ‘Have Nowhere to Live’ – Nebraska Public Media
- Interest Rate Hikes Have Cooled Nebraska Housing Market – Nebraska Public Media
- When will housing affordability improve? Spoiler alert: It will take some time – Nebraska Examiner
- U.S. Cities With the Least Home Inventory – Inspection Support Network
- 3 Building Blocks for More Housing in Nebraska – Platte Institute
- Nebraska Fact Sheet-2022 – U.S. Mortgage Insurers
- 2021 FHA Annual Report to Congress – HUD
- Nebraska Housing Market: House Prices & Trends – Redfin
- Nebraska Housing Market: 2025 Home Prices & Trends – Zillow
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