Millennials in Omaha can actually afford to buy houses. That’s not the case in most U.S. cities
Millennials in the Omaha area have managed to capture the American dream of homeownership more than most other similarly aged folks in large metro areas across the country.
So says a new analysis of U.S. census statistics by the University of Nebraska at Omaha’s Center for Public Affairs Research.
The dive into the data shows that among the 100 largest metro areas, Omaha-Council Bluffs nabs the No. 7 spot for the biggest share of people age 25 to 34 who own a home.
Nearly 47 percent of that age group locally are homeowners, the research revealed, compared to about 36 percent in metro areas nationally.
Omaha also rose to the No. 10 rank for its share of people ages 35 to 44 who own homes (that’s a gain of seven ranking spots since 2010).
About 65 percent of that 35-44 age group locally are homeowners, compared with an average of 57 percent for metro areas across the nation.
The relatively high proportion of young homeowners in the Omaha area comes despite fierce competition locally for houses traditionally within the reach of first-time homebuyers. Home prices also have risen, and lately so have interest rates for mortgages.
But area real estate leaders say certain attributes — including increasing income levels and reasonably priced houses in a relatively stable market — help mitigate the challenges and make the Omaha area stand out among its peers.
“If the younger homeowner needs to relocate they can sell their home without the fear of a large financial loss,” said Susan Clark, vice president of residential sales for PJ Morgan Real Estate.
Doug Dohse, president of the Omaha Area Board of Realtors, said affordable home prices are a major factor in pulling the would-be renter toward homeownership. In the Omaha area, the median sales price of an existing home is about $183,000, compared with about $265,000 nationally.
Median household income both in Omaha and in Nebraska grew 3.4 percent in 2017 over the year before, outpacing the national rate.
And the midpoint price paid for an existing home in the Omaha area is about 8 percent higher than it was the year before, which bodes well for an investment. Real estate sites Trulia and Zillow show that median monthly rent in the area is $1,300.
Dohse, also an agent with Berkshire Hathaway HomeServices Ambassador Real Estate, said he has started to see a slowdown in bidding wars for houses, which can be good news for first-time buyers who wouldn’t have to notch up an offer to get their dream houses.
And while the low inventory of for-sale houses remains a nagging barrier to homeownership — there are about 40 percent fewer houses on the market today than five years ago — the number of available properties recently saw a slight 3 percent uptick since last year.
UNO’s David Drozd, who compiled the homeownership rankings, said another contributor to the local strong showing of millennial homeowners is that the Omaha metro area in general has a relatively high proportion of people in that age range heading households — be they in rentals or owner-occupied homes.
Indeed, he said, census data shows 19 percent of Omaha-area households headed by a person in the 25-34 age range, compared to less than 16 percent nationally. That puts Omaha at No. 4 in terms of metro areas with high shares of millennial heads of households — behind places such as Austin, Texas, and Salt Lake City, Utah. (Omaha’s No. 4 rank is a gain of 11 spots since 2010.)
Conversely, Omaha-Council Bluffs ranks near the bottom of the 100 large metro areas for its share of households headed by someone ages 65 to 74. Drozd attributes that No. 85 rank to the high count of local retirees who fly the coop and move to sunnier climates.
What the demographics reveal, Drozd said, is an Omaha metro area with a relatively large portion of residents at a life stage associated with shifting from renting to owning. He said it’s a call for local homebuilders to get busy.
“They have the green light to go full-steam ahead,” he said, “as demand from millennials will gobble up what they supply.”