Maggie and Coby Smallridge were ready to buy a home. 

The couple in their mid-twenties got preapproved for a loan. They found a real estate agent. Their government-backed loan made the idea of homeownership seem doable. 

But with every house, they ran into a set of new roadblocks becoming all too familiar to Nebraska’s young adults. 

Houses in their price range vanished before the couple could even schedule a showing. They lost bidding wars to cash buyers. Sellers said no to their federal loan — too much red tape. 

They looked in Ashland. Louisville. Yutan. Weeping Water. Greenwood. The few houses in their budget of $200,000 kept disappearing. 

“It was just nonstop, just being bought out,” Maggie Smallridge said. “We didn’t even have choices.” 

For generations, Nebraskans have boasted the bargain of “The Good Life.” Choose to live in a state like California, New York or Colorado and you can have beaches, mountains, a city that never sleeps — and an eye-popping mortgage or rent payment to match. 

Choose Nebraska and you’ll get a calmer pace in a stable place to raise a family. Good schools,  economic stability and the cornerstone of the American dream: a home you can afford. 

But for the current generation of young adult Nebraskans, that last piece of The Good Life is proving harder and harder to grab.

Paychecks aren’t keeping up with what it costs to buy a home. And it’s pricing out young Nebraskans like the Smallridges hoping to make the jump to homeownership, like their parents and grandparents did.

From 1970 to 2024, the median household income in Nebraska, adjusted for inflation, grew by 40%. In that same time frame, the median home price more than doubled. 

And it has grown far worse since the COVID-19 pandemic: From 2020 to 2024, the median household income in Nebraska grew by a fraction of a percent. Home prices skyrocketed 20%. 

In just four years, Nebraska home prices grew an astonishing 72 times faster than our incomes. 

“We keep telling people (out of state) that we have this low cost of living … but it has increased so much for us,” said Josie Gatti Schafer, director of the Center for Public Affairs Research at the University of Nebraska at Omaha. “We have priced ourselves out of our own market.”  

The problem runs border to border. In Lincoln’s Lancaster County, housing eats up more of people’s paychecks than anywhere else in the state. In Omaha, lagging house construction is leading to an apartment-building boom. Small towns are offering free land or down payment assistance to convince people to build new homes. 

And it’s also uniquely hammering the state’s young adults. More millennials carry student loan debt than the generations before them. Young adults are getting married and forming two-income households later in life, making it harder to buy a home. And when they do try, they face a shortage of more than 120,000 housing units and skyrocketing prices that outpace their paychecks.

"The burden falls on young people," said Laurie Goodman, an Urban Institute fellow specializing in housing finance policy. "If you think of someone who's been a homeowner for a long time and home prices go up, it doesn't really affect them … if you think about someone who was renting and wants to buy for the first time, that rise in housing costs relative to income is just killer."

****

Maggie Smallridge knew the pandemic had changed the housing market. She just didn’t realize how much. 

In 2018, she and her husband were ready to start college. They were in no position to buy a house, she said. 

“But crap, if we could go back, we should have,” she said. 

And she’s right — Nebraskans can afford much less home today than they could before the pandemic. 

In 2019, the median Nebraska household income was about $61,440. On average, most people can afford a home roughly 2.5 times their income, according to the federal government. You shouldn’t spend more than 30% of your income on housing when utilities and insurance are included, according to the U.S. Department of Housing and Urban Development. 

So in 2019, an affordable home for the median Nebraska household cost roughly $163,598 — close to the median home value of $155,800 at the time. 

But by 2024, the median household income in Nebraska was $76,475. An affordable home for that salary would cost roughly $201,188. 

The median home price in the state that year: $238,600 — meaning the average Nebraska household would need to make an additional $15,000 a year to afford it. 

"That is really, really difficult for a young family that doesn't have anything to sell in order to buy," said Cliff Mesner, co-owner of Mesner Development. 

The growing gap between wages and home prices is in part because of the pandemic. Low interest rates and moving fever kicked off a homebuying trend, fueling the price increases we still see today. 

"People weren't afraid of paying $30,000, $50,000 over asking price just to have the house (if) there were seven offers and they wanted it and it was their dream home," said Nelson Jett, a North Platte-area real estate agent.

But it’s also an aftershock of the Great Recession. The 2008 financial crisis put developers out of business; foreclosures flooded the market with cheap homes; it grew harder for buyers to get mortgages. The construction industry screeched to a halt. 

"We built 5 million fewer homes that decade than we did any decade since World War II," Mesner said. "One (construction crew) after another went bankrupt or went someplace else. The work wasn't there because nobody was building the housing."

Nebraska dropped to a rock-bottom 5,150 building permits issued in 2009, half of where we’d been five years earlier, according to census data.

Since then, construction has picked up, but the lack of housing supply remains: Nebraska’s construction workforce still lags. Land is costly. The pandemic brought extreme spikes in the cost of materials, then Biden-era inflation and now Trump administration tariffs have kept those costs high. As a state, we aren’t building fast enough to keep up with an aging housing stock. 

“The supply choked, but the demand didn’t,” said Shannon Harner, executive director of the Nebraska Investment Finance Authority. “You see this gap between what’s affordable and what’s available.” 

Earlier this month, Congress passed a bipartisan package of laws aimed at narrowing that gap. The package included adjusting federal regulations to make it easier and cheaper for developers to build and tightened restrictions on large institutional investors buying up single-family homes. The bill, sponsored by Nebraska's U.S. Rep. Mike Flood, will hopefully lower housing costs by increasing the supply, the Republican  said. 

When Flood graduated college, the idea of homeownership was more expected.. He and most of his friends bought homes by the time they were in their mid-twenties. 

"That's the American dream, and right now, the American dream really only happens for first-time homebuyers on average at age 40, which is completely ridiculous," Flood said. 

In West Point, a teacher backed out of a job because she couldn't find a place to live, he said. In Columbus, there are 800 open jobs but not enough places for those potential workers to live. 

"It's that group of people that we are trying to be attractive to (as a state)," UNO’s Schafer said. "Being able to buy something you both like and is affordable to you is definitely going to keep people at least thinking about staying in the state longer." 

*** 

Melissa Roman thought a house would be within her means. 

She was already able to afford $800 in rent on her three-bedroom Hastings apartment. She had just gotten a raise as a phlebotomist. That, plus the extra money she brought home through overtime and picking up shifts as a certified nursing assistant could cover a couple hundred dollars more toward a mortgage payment, she thought. 

It would mean a home for the 34-year-old and her two daughters. It would mean a yard, and maybe a pet. 

But financing a home was easier said than done: Banks didn't like that Roman had less than two years of experience in healthcare. They wanted proof that she had ample savings in the bank. 

Roman's boyfriend was willing to cosign, and she had a $6,000 down payment — money that would have drained her savings. But three-bedroom homes in Hastings were either out of her $200,000 budget or needed costly repairs. 

"What if we come across a leak ... or if we need to replace something? Then I wouldn't be able to have that money for backup," Roman said. "You basically have to accept a cheap house with a bunch of problems ... but is it even worth it to have a lower mortgage if the house is falling apart?" 

For years, the gap between rentals and monthly payments on a home has been widening. In Omaha in 2016, rents averaged $886, compared to $1,271 in monthly payments on a home, according to Zillow. That’s a $385 difference. 

Today, though, the average Omaha rent is $1,443, compared to a $2,760 monthly home payment — a $1,317 difference. 

"People normally have a bias towards, 'Oh, I want to own a home eventually, it's the American dream," Goodman of the Urban Institute said. "The economics now are such that it makes many pause … it's more favorable to rent than has historically been the case." 

Housing in Nebraska is still cheaper than the country as a whole. The median home price in the state is nearly $100,000 lower than the national median of $332,700. Nebraska's price-to-income ratio of 3.1 — how many years a household must work to afford a home — is also lower than the national ratio of 4.1.

But Nebraska's price-to-income ratio is growing faster than both its neighbors and the country. From 2020 to 2024, Nebraska's price-to-income ratio surged by 20%. The national price-to-income ratio grew by 16% in that same time frame. 

“We’re not affordable for Nebraskans,” Schafer said. "If you're trying to move from that starter home to a larger home, in the last 10 years, that house has gone up so much, you're now priced out of that market and you're stuck in your starter home or you're stuck in your rental." 

In North Platte, Jett finds that the new $350,000 builds meant to be starter homes are far too costly for first-time home buyers who can afford a price tag between $200,000 and $250,000.

There are few homes in that sweet spot, said Ashley Kaiser, an Albion-based real estate agent. "There's just not a lot available, so when something comes up … you end up in a bidding war."

Kim Zwiener, president of the Nebraska Realtors Association, said she has seen more young clients who will buy a home and rent rooms to friends to help pay their mortgage, or young adults who are only able to afford a down payment because of an inheritance. She thinks about her first home, bought for $65,000 in 2002 — $122,568 in today’s dollars. 

“There’s no way you could find a livable home for $65,000 right now,” she said. 

The Smallridges tried to find something livable within their means. It didn’t feel like they were asking for a lot with their list of non-negotiables: two or three bedrooms, a garage and a yard. 

But after four months of house hunting, they let their preapproved loan expire. They stopped looking in September 2023. 

Maggie still takes a peek at Zillow every week, just to see what’s out there. 

“I get depressed every time I look,” she said.

This story was originally published by Flatwater Free Press, an independent, nonprofit newsroom focused on investigations and feature stories in Nebraska that matter. Read the article at: https://flatwaterfreepress.org/priced-out-of-the-good-life-for-young-nebraskans-homeownership-grows-increasingly-out-of-reach/