An analysis by John McCoy, an associate economist at the Omaha branch of the Federal Reserve Bank of Kansas City, indicates that Nebraskans' strong saving habits may help them in reaching homeownership goals. In 2024, the average income in Nebraska was $64,000 after taxes, compared to an average expenditure of $54,000 per year. This trend has led to a savings gap that is nearly double the national average in recent years.
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McCoy pointed out that the difference between income and consumption is assumed to contribute to savings, whether kept in bank accounts or invested. He noted, "It’s just the mechanics of the balance sheet that households in Nebraska tend to have more ability to save." Nationally, saving behaviors have been in decline since the 1970s, impacting how individuals finance large purchases such as homes.
Recent trends in mortgage rates, which have surpassed 7% amid inflation pressures linked to the war in Iran, pose additional challenges. While median home prices have risen in Nebraska, these increases lagged behind those in other states, with significant price hikes occurring post-2022.
As listing prices increase, first-time buyers may need more time to save for down payments. A typical target for lenders is a 20% down payment, yet many will accept lower contributions based on creditworthiness. Zillow reports that the median home price in Nebraska is $280,673, implying that a 20% down payment would require slightly more than $56,000.
Nationally, first-time buyers are estimated to need 15 years to save for a significant down payment. In Nebraska, however, owing to higher saving rates, this timeframe shortens to about six years for a 20% down payment, and around four years for a 10% down payment.
Robin Ambroz, chief programs officer at the Nebraska Investment Finance Authority, emphasized the continuing importance of NIFA resources for homebuyers. She noted that nearly two-thirds of their loans in fiscal year 2026 included down payment assistance.
Despite these favorable saving habits, McCoy cautioned that the analysis relies on averages, and a third of Nebraskan households earn less than $50,000 annually, which complicates saving for many. Additionally, around 250,000 Nebraskans are renters who may struggle to save enough for homeownership. McCoy acknowledged that while challenges have grown in recent years, Nebraska's moderate home prices and saving trends still offer a relatively more affordable pathway to homeownership compared to other regions.