Omaha Housing Market:The $1M Housing Forecast for 2050

Right now, according to FRED data, the median closed sales price in Omaha is around $400,000. It peaked at $438,000 in 2022 and has backed off since then. If you go back about 25 years ago, right before the dot-com crash, the median was $180,000. In the early 1960s, it was $17,000. I helped a past client whose mom was selling her house a couple years ago, and she was the original owner. She originally paid $12,000 or $18,000, and she couldn't believe the prices were so high. Today's high prices are tomorrow's great deals.

I asked my audience how they feel about the Omaha real estate market heading into the second half of the year. Ten percent were optimistic, 23 percent were cautiously interested and watching rates, prices, and inventory closely, 30 percent were frustrated because monthly payments are still too high, and 37 percent were on the sidelines waiting for the market to make more sense. That tells you a lot about where we are right now. This market is wonky. Some homes sit for months, and others get multiple offers, and they can be right next door to each other.

The median U.S. home price will likely hit $1 million around the year 2050, when the millennial generation is hitting the traditional age of retirement. That's the prediction from Lawrence Yun, chief economist at the National Association of Realtors, who spoke at a conference in Washington, D.C. It may be hard to envision that, but back in 1990, the median sale price was $90,000. Even San Francisco, considered an exorbitantly priced real estate market at the time, had a median price of $250,000 in 1990.

Homeowners will continue to build wealth while renters are simply spinning their wheels, Yun said. If you're waiting for that big 38 percent price crash, you're running east looking for a sunset, in my opinion. Yun does not expect an economic recession to hit the U.S. in 2026, projecting job gains for the year at a solid 400,000. His 2026 housing market forecast remains unchanged since he revised it in April when he made a sharp downward revision to the projected home sales for the year in response to surging interest rates. He had projected a 14 percent increase in the number of sales because before the Iran conflict, you had interest rates right below 6 percent, and the market was really poised to take off. When rates go down, that makes homes more affordable, and that's going to pull more people off the sidelines.

The economist now expects mortgage rates to average 6.5 percent across 2026, roughly where they sit now. He sees home prices rising 4 percent this year, up slightly from the 3 percent gain recorded in 2025. Yun now projects existing home sales transaction volume will grow 4 percent from the 30-year low reached in 2025 as higher interest rates kept the market frozen. Although mortgage rates have surged off three-year lows they touched in late February, rates remain modestly lower than they were a year ago, breathing some life into the housing market.

Omaha is affordable compared to coastal markets. Basements are standard here, which is a huge advantage. You get a lot more finished square footage for your money. We have strong local builders like Charleston Homes who build semi-custom homes with flexible options. You can customize garage placement, stone coverage, and basement finish level. They'll rough in the basement for $18,000, and then you can finish it yourself later if you want. Their Jackson 2-story model with a finished basement is popular. Charleston has their process dialed in, and they build a limited number of homes per year, so they're not overextended.

If you're buying an older home, you have to budget for maintenance. If you're buying a home built before 1990, you have to budget for more maintenance. RRP lead paint regulations apply to rental properties built before a certain date. Older homes may have knob-and-tube wiring or screw-in fuse boxes, and those are not insurable now. Historical homes in Midtown and the Gold Coast require a significant maintenance budget and adherence to historic district rules. Those homes are really cool, but you've got to have a lot of money to maintain them.

Charleston Homes is kind of semi-custom, so you can have the garage kicked back if you want. If you want stone halfway up the front of the house, or if you want it all the way up, you can do that. If you want to upgrade, add a garage, or have the garage go further back, there's a lot of fun upgrades. Now that all comes at a price, but for being semi-custom, they're very affordable and they do a great job. You can really dial in some of those upgrades. They give you a lot of options. If you want a finished basement or if you want it finished halfway, they'll do it for like $18,000, and then you can finish it on your own. They rough it in to where they put up the drywall and the electrical, and they'll rough in the bathroom, but then if you want to frame out doors and that sort of thing, you can.

I thought it would be fun to look at what you get in San Francisco versus what you would get in Omaha. I pulled up a listing at 1231 Silver Avenue in San Francisco for $717,000. It's a 3-bed, 1-bath, 1,200 square feet, built in 1917. The description says it's a cute stucco-covered Victorian with serious charm, a clean backyard, and a double garage. Light-filled kitchen with views of San Francisco Hills and Bernal Hill. Beautiful neighborhood, close to shopping and San Bruno Avenue. Classic Victorian layout and original hardwood floors and many special touches. Priced appropriately with immense potential to be someone's diamond in the rough. Two bedrooms upstairs and one bedroom downstairs.

Please do not disturb the tenants, this is tenant-occupied. When you're buying a tenant-occupied property, those tenants come with the property. You don't just kick them out. That lease is binding and that goes with the property. You want to make sure you look at that lease. Here's the other thing too: you're talking California, so I'm sure there's all sorts of regulations as far as when the lease is up. The photos show the front, the back, the bathroom, it's pretty rough. The basement or lower level appears rough. I don't know, maybe it's not a basement, I'm not sure. The backyard looks like it was probably a giant weed bed that they had to clean up. I bet that was all weeds. They've got that backyard looking pretty nice. If they did have to clean that, that's a lot of work.

Tearing it down would probably be an issue. Imagine the regulations involved with California with tearing something down. You want to get a good agent locally that can advise you on some of these things. I wonder how much asbestos is in those walls. Tenant leases transfer with property, so you can't just evict. California has strict tenant and renovation regulations. Potential asbestos concerns in older properties. I remember taking a trip with some friends around 1990. His girlfriend at the time, now his wife, had a sister who had a house in Fountain Valley, California. Her sister's husband was a physician, and I remember at the time they paid $275,000 for the house. I was just shocked at that price because it was like, you know, but that very same house today would be unbelievable. I remember driving from the interstate over one of the big long bridges, and we looked over at Oakland. It looked pretty rough.

Let's compare. In San Francisco, $717,000 buys you 1,200 square feet, 3-bed, 1-bath, built in 1917, needing work, tenant-occupied. In Omaha, $749,000 buys you 5-bed, 5-bath, 4,300 finished square feet, built in 2005, at 174th and Harney, which is pretty close to our office here. This one is 20 years old, and it's listed by Nebraska Realty. It's really beautiful. Look at the tray ceiling. That's really nice. Big too. The primary bathroom is ginormous. Vaulted ceilings. Look at that closet, the closet is huge. There's the basement. In Nebraska we have basements. That's a nice bar. They got that jazzed up pretty nice. Look at that covered deck. Look at all that landscaping and everything. That's really nice.

It's contract pending on the market for backup offers. That means it's already under contract, so they might be finishing out the home inspection, but it's still on the market. That means if you go out there and fall in love with this thing and you wrote an offer, you're in second position. That first offer would have to fall apart. Or let's say there's a thing called first right to purchase. You'd have to talk to the agent and find out what the skinny is on it. If it's subject to a first right to purchase, those first buyers would have, let's say, 48 hours to either remove the home sale contingency or the seller could take that second offer, if that makes sense.

Mortgage rates are right around 6.65 percent right now, according to Mortgage News Daily. We were right below 6 percent prior to the Iran conflict, and then rates went up. When rates were lower earlier this year, purchase applications were higher. Purchase applications look into the future and say, okay, these will be closed sales 90 days from now. When you're looking at purchase applications, you can see earlier this year, purchase applications were higher. In 2024, it was even lower. In 2023, it was lower still. In 2022, look at all the applications when rates were lower. You had more people applying for a mortgage. But as rates go up, more buyers are pushed to the sidelines.

Look at December of 2021 versus where we are now. That was when homes were more affordable because rates were lower. Affordability is not just price, it's overall cost, the cost of money. When rates were at 3 percent, we didn't talk about affordability. We had an abundance of buyers. They had to raise rates in order to tamp down demand, and it did, it tamped it down a whole lot. Those buyers are still out there, they're just sidelined, and they're very frustrated, which I don't blame them. The buyers all of a sudden got older.

I also want to show you the 10-year Treasury yield and the 10-year U.S. Treasury. If you want to look at interest rates, what are interest rates going to do, you've got to follow the 10-year Treasury. They follow in tandem. You can see when the Treasury goes up, what do interest rates do? They go up because an investor with no risk for a U.S. 10-year Treasury will get 4.46 percent. So what do they have to do to make people want to invest in a mortgage? They have to offer a higher rate. That difference is called the spread. Right now, the difference is just about 2 percent. In 2025, the spread at this time was higher. In 2024, it was even worse. In 2023, the spread was almost 3 percent. If we had today's spread versus where it was three years ago, interest rates would almost be a full point higher.

Folks need to quit focusing on specific numbers like rates or home prices. They need to look at down payment assistance programs. There's a lot of programs out there where you can get down payment assistance. We have a thing called NYFA where you can finance the down payment. It's two mortgages. You've got your main mortgage and then you have the mortgage on the down payment which is only at 1 percent. That's a good, real good opportunity, and a lot of folks should consider down payment assistance. Then that way you have money held back for maintenance if you need to do maintenance.

We've got a client that Sam and I are helping, and they're using a program where they're coming in at closing for just a little bit over $1,000 to purchase their first home. Opportunity is out there. It's a long-term game. When you're buying your first home, there is going to be some concession of some sort. You're either going to concede on price a little bit, you're going to concede a little bit on location, or amenities. You're not going to get everything you want. Not many people do. You've got to have a long-term outlook toward it.

I'm amazed when people will buy a home and then turn around and sell it a year later. I understand things happen in life, but if you're in that situation in a flat market, you're not always going to make money in real estate. That's why it's important to have a long-term outlook, because if you have to turn around and sell it a year later or two years later and the market is flat or maybe the market takes a little bit of a dip, then you're going to be writing a check at closing. In some cases, you're better off renting. Try to have at least a five-year outlook.

Lautz described a surprisingly wide range of buyers who remain active even in a wonky market. They include boomers who bought once decades ago and never sold before, young owners who bought condos during COVID at ultra-low rates and now want to trade up, and renters who have pets and need space or a yard. We need to talk incessantly about first-time homebuyers, but what about first-time sellers? Lautz noted that 17 percent of younger baby boomers who sold this year had never sold a property before.

Sometimes people have a lot of, you hear things like, well, they don't build them like they used to. Good thing they don't, because sometimes an older home has a lot of character, but you also have to measure your ability, how handy you are. If you're not handy and you buy a really old home, those old homes are cool, but if you're not handy, it takes a lot of money to rehab a property and to make renovations. You think, well, I'll just do it myself, but then again, you have to do it right and pull permits. That can be very expensive.

You've heard me talk about this before. It's just like when people tell me they want passive income by investing. I'm a big proponent, I believe in real estate investing, but it's not for everybody. There's a learning curve to it. The industry does a great job of selling homeownership and selling real estate investing like it is the cat's meow, but it's not for everybody. Now that doesn't mean that you have to be a renter forever, but you want to go into it with eyes wide open and you've got to have some money set back for repairs and maintenance.

Even if you do as much due diligence as you can, there's still going to be some surprises. Some folks don't like the newer homes because they're too cookie cutter, and I can understand that, but at the same time, if you're not handy, then you should take that into account. Some of those old homes, especially some of those old historical homes, are really cool, but you buy one of those historical homes and there's going to be a lot of things that you've got to do in terms of just maintaining that. If you tear into an old house and make major upgrades, you need to be doing it to code, and that can break you.

I was helping a client and we were looking at a condo down in the Old Market, and this was a condo built around, we did the home inspection and the roof was 20 years old. So we had a roofer come out and look at the roof. A lot of these condos in this particular condo unit were being replaced. To replace that roof on that particular condo unit was $90,000. It had a lot involved with it. It was a flat roof, and in order to change out the roof, they had to have a crane. If the crane was only rented for a week, then it would be $15,000 less. There's a lot to it, and I think a lot of folks out there just don't realize.

I remember when I was a first-time homebuyer, I would listen to my dad and he would be such a downer. He would sound just like I do now. I didn't listen to him. Now I look back and I'm like, the first home I bought was built in 1890 or 1900. I bought it in 1990 or 1991 during the first Gulf War, and I paid $10,000 for this thing. It was 90 years old at the time. Let me tell you what, it was old. It had a whole bunch of issues with it. I didn't even think about it because I was 20-some-odd years old. If you do make a mistake, you do learn from it, but sometimes it's a lot cheaper to learn from other people.

I didn't listen to my dad. He's like, I wouldn't buy that thing. I didn't listen to him, but it cash flowed. I did okay with it. I was still living at home and I bought a rental property. My interest rate at the time was 13 percent, and my principal, interest, taxes, and insurance, it was a rental property, so I had to come up with 20 percent down, which was $2,000, and then I financed the rest. My payment was $135 and I had it rented for $400. I just thought it was all that and a bag of chips. But knowing what I know now, would I ever buy that property? No, because it was too old. Maintenance on that is hard.

At the time when I bought that house, they didn't have a lot of the regulations they have now. In 2010, they passed that RRP lead paint regulation. At the time I could go down there and paint it because this was 1990. But nowadays you've got to use all the lead protocol, be lead certified to work on an older property like that. Back in those times, yeah, but nowadays you can't just, if it's your own home, yes, you can do it. But if it's a rental property, then you have to follow those RRP regulations. People get the pamphlet, they don't read it, and they're not even aware these regulations exist. They should be, but they're not. There's going to be an attorney somewhere that's going to make a ton of money off of suing landlords that don't use the RRP regulations.

If you're relocating and trying to decide where to buy, here's what you need to think about. Omaha gives you affordability, basements, strong local builders, and a rental market that's growing. You get a lot more square footage for your money compared to coastal markets. Papillion is a great area, especially the 114th and Schram area, and Charleston Homes builds a quality semi-custom product with a lot of flexibility. San Francisco gives you access to a major coastal city, but you're paying $717,000 for 1,200 square feet built in 1917 that needs work and comes with tenants.

The market is wonky right now. Some homes sit for months, and others get multiple offers. Buyers are on the sidelines waiting for rates to drop. Purchase applications are lower than they were when rates were at 3 percent, but they're higher than they were in 2024. The buyers are still out there, they're just frustrated. If you're waiting for a 38 percent price crash, you're running east looking for a sunset. The data doesn't support it. Homeowners will continue to build wealth while renters are simply spinning their wheels.

FAQ

Will home prices really hit $1 million by 2050?

According to Lawrence Yun, chief economist at the National Association of Realtors, the median U.S. home price will likely hit $1 million around the year 2050 at 4 percent annual appreciation. That's about 25 years from now. It may be hard to envision, but back in 1990, the median sale price was $90,000. Even San Francisco had a median price of $250,000 in 1990. Today's high prices are tomorrow's great deals.

Do I really need 20 percent down to buy a home?

No. That's a persistent myth. The typical down payment for first-time homebuyers was just under 10 percent last year. There are down payment assistance programs out there like NYFA where you can finance the down payment at 1 percent interest. We've got a client coming in at closing for just a little bit over $1,000 to purchase their first home. Don't let the down payment myth hold you back.

What should I budget for maintenance on an older home?

If you're buying an older home, you have to budget for maintenance. If you're buying a home built before 1990, you have to budget for more maintenance. RRP lead paint regulations apply to rental properties built before a certain date. Older homes may have knob-and-tube wiring or screw-in fuse boxes that are not insurable now. Historical homes in Midtown and the Gold Coast require a significant maintenance budget and adherence to historic district rules. If you're not handy, take that into account.

Are baby boomers downsizing in retirement?

Not really. Baby boomers are not really downsizing as they hit retirement. Younger boomers are often buying homes with similar square footage, just in different locations, often near grandchildren. Seventeen percent of younger baby boomers who sold this year had never sold a property before. The data doesn't support the downsizing narrative.

Why are some homes sitting while others get multiple offers?

The market is wonky right now. Some homes sit for months, and others get multiple offers, and they can be right next door to each other. Buyers are on the sidelines waiting for rates to drop. Purchase applications are lower than they were when rates were at 3 percent, but they're higher than they were in 2024. The buyers are still out there, they're just frustrated. Pricing, condition, and location all matter.

Should I wait for the market to crash before buying?

If you're waiting for a 38 percent price crash, you're running east looking for a sunset, in my opinion. The data doesn't support it. Lawrence Yun does not expect an economic recession to hit the U.S. in 2026, projecting job gains for the year at a solid 400,000. Homeowners will continue to build wealth while renters are simply spinning their wheels. If you have at least a five-year outlook, buying now makes sense.

< Older Post Newer Post >