Omaha’s Job Growth Fuels Multi-Family Housing Market Resilience
- MMCG
- Jun 29
- 14 min read
Introduction
Omaha, Nebraska is experiencing a convergence of robust job creation and steady apartment demand, offering valuable insights for a Nebraska multi-family feasibility study. The city added 5,700 jobs in May alone, bringing total nonfarm employment to over 521,000 Unemployment remains low at 3.1%, signaling a tight labor market. This economic momentum – particularly in sectors like healthcare, hospitality, education, and government – is underpinning household formation and fueling demand for apartments. At the same time, Omaha’s multi-family housing metrics show a market in near equilibrium, with new supply being absorbed almost as fast as it’s delivered. This report analyzes how resilient job creation in Omaha supports rental demand despite broader macroeconomic softness, and what these trends mean for investors, lenders, and developers eyeing new opportunities.
Omaha’s Employment Surge and Economic Resilience
Strong Job Growth: Omaha’s employment base has expanded markedly. In the past year the metro gained roughly 4,800 jobs (+0.9%), roughly in line with its pre-pandemic average. The recent pace accelerated into spring 2025 – in May alone 5,700 net new jobs were added, a clear indication of economic resilience. This growth spurt pushed Omaha’s job total to an all-time high, and kept unemployment around 3.1%, well below the national rate (~4.2%). Such low unemployment and steady hiring are key fundamentals supporting housing demand, as more employed people translate into more household formation and need for housing. Importantly, Omaha’s labor force participation has been strong, and in-migration has accelerated to a decade high of 1.2%, adding over 12,000 new residents annually. These new residents are drawn by plentiful jobs and Omaha’s relative affordability (the city’s rent-to-income ratio is ~18%, far below the U.S. average of 26%), creating a solid base of renters.
Service Sectors Lead the Way:Omaha’s year-over-year employment change by sector (blue bars) and total change since Feb 2020 (orange markers). Service industries like health care, education, and hospitality are driving job gains, while goods-producing and office-linked sectors lag behind (Source: BLS / CoStar).The job gains in Omaha have been concentrated in service-oriented industries. Over the past year, education and health services employment climbed about 4.8%, reflecting expansion in hospitals, clinics, and schools. The leisure and hospitality sector (encompassing hotels, restaurants, entertainment) jumped roughly 7.2%, as consumer spending on services rebounded strongly. Even the public sector contributed, with government jobs up about 1.9% year-over-year, thanks in part to new government and public education hiring. These gains underscore that Omaha’s growth is broad-based across industries that directly support household formation (e.g. healthcare jobs often spur in-migration of professionals, while hospitality growth draws in service workers). At the same time, a few sectors illustrate the “broader macro softness” evident nationwide: trade, transportation & utilities employment is down about 2.5% year-over-year, manufacturing has slipped 2.8%, and office-using industries (like professional and business services) are down about 1.9%. These declines align with national trends of cooling goods production and corporate retrenchment. Notably, office-using employment in Omaha remains roughly 12,000 jobs below pre-pandemic levels, reflecting persistent headwinds in white-collar sectors. Overall, however, the surging service sector growth has outweighed losses elsewhere, yielding net job creation that is fueling confidence in Omaha’s economy.
Impact on Household Formation and Rental Demand
Rapid job growth in Omaha directly feeds into household formation, as new workers move to the area or young adults find employment and set out on their own. With Omaha’s population now growing about 1.2% annually from in-migration, the metro is adding thousands of households each year. Many of these new households turn to renting, either by preference or necessity. According to Marcus & Millichap research, low unemployment and steady job creation support rental housing demand even amid macroeconomic volatility. Omaha exemplifies this dynamic: its resilient job market has kept apartment demand robust despite concerns like high interest rates and national slowdowns. In essence, as long as people have jobs and are moving to (or staying in) Omaha, they will need a place to live. This translates into solid absorption of available apartments. The correlation is evident in Omaha’s recent data – trailing 12-month apartment absorption was about 2,400 units, one of the highest figures on record and roughly 30% above the metro’s historical average This strong absorption occurred even as broader U.S. rental markets saw a mild cool-down, highlighting Omaha’s localized demand drivers. In short, job creation = household formation = housing demand – a chain that is clearly intact in Omaha.
Multi-Family Market in Equilibrium: Supply vs. Demand
Omaha’s multi-family housing market has achieved a rare equilibrium in the past year, as new supply and demand are roughly in balance. Over the last 12 months, developers delivered approximately 2,404 apartment units, while net absorption totaled around 2,400 units, essentially a one-to-one match. Thanks to demand keeping pace with supply, the metro’s overall vacancy rate has held steady at ~6.3%, barely changed (-0.2 percentage points year-on-year). This stability marks an improvement from the peak vacancy of 7.0% seen in 2023, and keeps Omaha tighter than the U.S. average vacancy (8.1%). In effect, the feared oversupply from the construction boom of 2020-2023 has been absorbed by the market’s growth. Apartment hunters have more choices than a few years ago, but occupancy levels remain healthy from a landlord/investor perspective (approximately 93.7% occupied). Importantly, the steady vacancy suggests landlords have maintained pricing power, avoiding the need for widespread concessions. This equilibrium indicates an attractive risk-reward balance in Omaha: enough demand to fill new units, but not so much excess demand that the market overheats. For those conducting feasibility studies, Omaha demonstrates how a mid-sized metro can expand housing stock without eroding fundamentals, provided job growth and in-migration persist.
Key Multi-Family Metrics (Mid-2025):
Absorption vs. Deliveries: ~2,400 units absorbed in the past 12 months vs. 2,404 units delivered, effectively holding vacancy flat at 6.3%. This indicates new supply is finding renters at virtually the same rate it comes online.
Rent Growth: Asking rents have risen about 3.3% year-over-year, above Omaha’s long-term average (~2.0%) albeit down from the post-pandemic boom levels. Rent increases are broadly positive across all asset classes and submarkets, with some of the strongest growth in value-oriented areas. Notably, Central Omaha and Gretnaposted annual rent gains at or above 5%, leading the metro. These submarkets, one an urban core area and the other a growing suburb, illustrate where tenant demand is hottest – likely due to a mix of new jobs, favorable commute locations, and relative affordability attracting renters.
Vacancy by Class: A clear quality-tier divergence exists. High-end luxury properties (4 & 5 Star) are seeing vacancy around 9.6%, as they work through lease-up of many new deliveries. In contrast, mid-tier (3 Star)apartments have ~5.5% vacancy, and workforce housing (1 & 2 Star) is even tighter at ~4.8% vacant. This spread reflects that top-of-market units face a glut and need concessions to fill, while middle and lower-tier segments enjoy steady demand and limited new supply. Mid-income job growth (e.g. in education and health services) is bolstering the 3-Star segment, and ongoing affordability pressures keep the workforce segment full. Investors can interpret this as an opportunity in mid-market and value-add properties, which are maintaining high occupancy, versus caution in the luxury segment.
Construction Pipeline: Developers remain active, though somewhat moderated from peak building levels. About 4,800 units are under construction across the Omaha metro, equal to roughly 5.7% of existing inventory. This pipeline is heavily skewed toward high-end projects in specific submarkets – notably Downtown/Midtown Omaha and the Elkhorn area, as well as Council Bluffs just across the river. These are areas where developers have bet on future demand, given corporate expansions and planned infrastructure like the modern streetcar line in downtown. The new supply set to deliver in 2025 (approximately 3,500 units) will test the market’s ability to absorb additional units. For now, the pipeline size is elevated (above the historical average of ~2,500 units under construction) but not unprecedented. With tighter lending conditions, construction starts have begun to pull back, suggesting the pipeline will shrink after 2025. This hints at a possible supply gap in later years, which could benefit owners through reduced competition if demand stays strong.
Rent Growth and Submarket Dynamics
Even amid a high-supply environment, Omaha’s rent growth has remained positive, reflecting the underlying demand and affordability advantage. As of mid-2025, rents are up ~3.3% year-on-year metro-wide. This pace is above Omaha’s historical norm (roughly 2% annual rent growth), though about half the extraordinary 6-7% spike seen in 2022 during the national rental boom. In practical terms, landlords have been able to push rents modestly without driving tenants away – a sign of a healthy market.
However, rent growth is not uniform across the metro. As mentioned, Central Omaha (an area including Midtown and the core) and Gretna (a high-growth suburb) saw rents climb 5%+ in the last year. Other suburban areas like Papillion/La Vista and Ralston also saw above-average rent increases in the ~4–5% range, aided by limited new supply in those pockets and strong local job markets. By contrast, Downtown Omaha – flush with new luxury deliveries – had more modest rent growth around 2–3%, as owners compete with concessions to fill units. Similarly, West Omaha and other well-supplied areas are seeing only mid-2% rent gains. This bifurcation aligns with the vacancy patterns: submarkets with a lot of new high-end supply (Downtown, Elkhorn) have weaker rent growth, whereas undersupplied or moderate-cost areas (Bellevue, South Omaha, etc.) maintain pricing power. Overall, Omaha’s rent growth outperforming its historical average and the national average is an encouraging sign, suggesting that demand is deep enough to support incremental rent increases across most segments. For a feasibility analysis, this implies that pro forma rent growth assumptions in the ~3% range are reasonable for Omaha in the near term, with upside in certain high-demand submarkets.
Quality-Tier Performance: Luxury vs. Workforce Housing
One striking trend in Omaha’s multi-family market is the divergence in performance between luxury Class A properties and more affordable segments. The 4 & 5 Star properties (typically new builds with top amenities) are grappling with a relatively high 9.6% vacancy rate. This is more than 250 basis points above the pre-pandemic lows for Class A, owing largely to the wave of new deliveries that need time to lease up. Many of these high-end projects are clustered in the urban core and trendy suburban nodes, which means they’re directly competing for a finite pool of renters able to afford $1,500+ per month rents. Consequently, landlords have offered concessions (free rent periods, move-in discounts) to attract tenants, lengthening the time it takes to reach stabilized occupancy.
In contrast, mid-tier (3 Star) apartments – often older complexes or newer builds with fewer luxury features – are maintaining a much lower 5.5% vacancy. These properties benefit from strong middle-income job growth (for example, many new healthcare and education workers can comfortably afford mid-tier rents) and less competition from new construction in this category. Similarly, workforce or legacy housing (1–2 Star), which tends to offer the lowest rents in the market, is only ~4.8% vacant. Demand for affordable units is essentially outstripping supply – a common theme nationwide – keeping this segment extremely tight. Limited new development occurs in the low-cost segment (due to higher construction costs and thin margins), so vacancy has stayed chronically low. Omaha’s situation underscores that affordable housing retains very strong fundamentals: as long as the metro adds jobs across the income spectrum, there will be a deep renter pool for moderate and low-rent units.
For investors, this quality-tier split suggests different strategies: The upscale segment offers opportunity for long-term growth (as new Class A supply eventually gets absorbed and Omaha’s rent gap versus coastal cities remains large), but in the short term it comes with lease-up risk and softer rents. Meanwhile, mid-market and workforce housing investments provide stability and immediate cash flow given their high occupancy and consistent demand. Value-add strategies(renovating Class B/C properties) could be particularly attractive in Omaha now – capturing rent growth in a tight segment without having to compete with brand-new buildings. Lenders might also view mid-tier assets more favorably in underwriting, given their resilience evidenced by lower vacancy and steady rent increases.
Development Pipeline and Future Outlook
The ongoing development pipeline in Omaha will be a crucial factor to watch for its impact on the multi-family market. Currently, roughly 4,800 units are under construction, about 5.7% of the existing apartment inventory. To put this in perspective, that is a sizable expansion – for comparison, the U.S. as a whole is seeing about 5% of inventory under construction, and many peer Midwest metros are lower. Omaha’s pipeline reflects optimism by developers in the metro’s growth prospects: projects are concentrated in areas like Downtown/Midtown, where the new Mutual of Omaha headquarters (a 44-story tower under construction) and other downtown investments are expected to create jobs and draw residents. Another hotspot is Elkhorn (West Omaha), a rapidly growing suburb with a high-income demographic, where new upscale communities are being built to meet upscale demand. These locations align with the city’s development plans and infrastructure improvements (such as the modern streetcar line slated for 2026–27, which is intended to boost urban core connectivity).
Short-Term Outlook: In the near term (through 2025), Omaha’s supply wave will peak. With ~3,500 units scheduled to deliver in 2025, vacancy could see a modest uptick into the mid-to-high 6% range as not all new units will lease immediately. The CoStar forecast base case expects vacancy to inch up to around 6.5% by end of 2025 under the weight of deliveries – still a very manageable level. Rent growth might temper to the high-2% range during this lease-up period, as landlords compete for tenants with concessions in the most impacted submarkets. Crucially, Omaha’s job and population growth is projected to continue outperforming national averages (e.g. job growth cooling to ~0.8% annually, still above U.S. trend), which should provide the demand “ballast” to absorb new supply. As long as the metro keeps adding jobs in sectors like information technology, healthcare, and hospitality – and attracting new residents – absorption will stay positive. Indeed, forecasts call for another roughly 2,900 units of demand in 2025, indicating that the leasing of new buildings will steadily progress. The principal risk to this outlook would be if absorption falls short, particularly in the downtown luxury high-rises; if Omaha’s economy unexpectedly slowed or if remote work trends reduce downtown apartment appeal, those projects could see prolonged high vacancy. However, given current momentum, that risk appears limited.
Beyond 2025: There are signs that after this current boom, construction starts are decelerating (due to higher interest rates, cautious lenders, and saturated high-end segments). This means Omaha’s pipeline might shrink going into 2026–2027. In fact, local experts predict that by 2026 new starts will fall off, leading to fewer deliveries by 2027 – allowing any temporary glut to be worked off, If that happens, Omaha could swing back to tighter vacancy and faster rent growth in the later 2020s once the current batch of projects is absorbed. The long-term fundamentals remain strong: Omaha benefits from a diverse economy (five Fortune 500 companies are headquartered there), improving infrastructure, and a cost of living advantage. These factors should sustain above-average population gains and steady housing demand. Therefore, developers with a multi-year horizon might find opportunities in planning the next cycle of projects, potentially focusing on under-served segments (e.g. true affordable housing, or mixed-income developments) that the current luxury-focused wave did not address.
Implications for Investors, Lenders, and Developers
For Investors: Omaha’s multi-family market presents a compelling case of stability with growth potential. Occupancy is solid and rents are rising modestly – a recipe for reliable cash flows. Compared to hotter coastal markets, Omaha offers less volatility and a higher cap rate environment while still achieving rent gains above inflation. The data suggests that mid-tier and workforce housing assets are particularly attractive for near-term investment, given their low vacancies (≈95%–96% occupied) and strong demand drivers. Investors pursuing value-add acquisitions can capitalize on Omaha’s “rent gap” – upgrading older units to just below Class A quality could yield rent increases, tapping into that unmet middle-market demand. Meanwhile, opportunistic investors might watch the Class A segment for distress or soft pricing; if lease-ups drag on, some newly built upscale properties or development sites could trade at a discount, offering long-term upside once the market rebalances. It’s also worth noting Omaha’s relative affordability: with average effective rents around $1,250 and local incomes growing, there’s runway for rent growth before affordability becomes strained. Thus, total returns in Omaha multi-family could outperform many Midwest peers in the next few years, as the market absorbs new supply and returns to a tighter equilibrium.
For Lenders: Omaha’s strong job metrics and steady apartment performance should be reassuring for multifamily lenders. The market’s stable vacancy and positive absorption indicate low default risk on existing stabilized properties. When underwriting new loans, lenders will likely favor projects in proven demand locations and segments – for instance, a garden-style project in West Omaha or Bellevue catering to middle-income renters, which is more or less a “sure bet” for lease-up given current trends. Construction loans for luxury high-rises downtown may face more scrutiny; lenders will look closely at pre-leasing, sponsorship strength, and contingencies, knowing that Omaha’s luxury vacancy is near 10% and likely to rise short-term. Interest rate pressures also mean debt-service coverage is a key factor. Fortunately, Omaha’s rent-to-income ratios are low (18% on average), suggesting tenants have capacity to absorb modest rent hikes – which bodes well for NOI growth and debt coverage. Lenders can take comfort in the diverse economic base (no single industry dominates employment heavily), which insulates the multifamily sector from a sudden local downturn. Overall, expect lenders to remain cautiously optimistic, perhaps preferring refinancing and acquisition loans on stabilized assets (where metrics are strong), while being selective on new development financing until the current pipeline is absorbed.
For Developers: The window for starting new projects in Omaha is tightening, but not closed. Developers who already have projects underway are riding the tail end of this construction cycle – their focus now should be on differentiating their product and achieving lease-up in an increasingly competitive high-end market. Given that 60%+ of the pipeline units are concentrated in just a few submarkets (Downtown, Midtown, Elkhorn), any developer planning a new project should carefully assess submarket supply. There may be opportunities in submarkets that are underserved: for example, South Omaha, Cass County, and parts of Council Bluffs have very low vacancy and limited new supply, indicating potential pent-up demand. A developer aiming at those areas – or building more affordably priced product which few others are delivering – could find a niche. Additionally, Omaha’s ongoing corporate developments (like the Mutual of Omaha tower, and other expansions) will create localized demand surges; developers can align project timelines and locations to capture those new renters (e.g., more units near the Mutual tower opening). In terms of product, the trend of high vacancy in studios and one-bed units versus stronger demand for two- and three-bed units (for roommate or family living) suggests that future projects might adjust unit mix to include more larger units, catering to sharing renters or young families who are priced out of homeownership. Finally, construction costs and interest rates remain a concern – so developers should be conservative in pro formas, perhaps anticipating slower lease-ups and ensuring projects pencil out even at slightly higher cap rates. That said, Omaha’s outlook – continued job growth, population gains, and a likely slowdown in new supply after 2025 – means that well-conceived projects can still be feasible. The key is to hit the market right as the current supply is digested, so timing and target segment will be critical.
Conclusion
Omaha’s recent experience illustrates how a mid-sized metro can leverage economic resilience to support its housing market. The surge in jobs across healthcare, hospitality, education, and public sectors has not only put paychecks in more people’s pockets, but also translated into sustained rental demand. Even with a significant influx of new apartments, occupancy has held firm and rents continue to rise modestly – clear evidence that job growth = demand growth in real estate. This tandem of robust employment and balanced housing supply positions Omaha as a relative safe haven amid broader macro softness. While other markets grapple with oversupply or weak job creation, Omaha is benefiting from a “goldilocks” scenario: enough growth to fill new units, but discipline enough to avoid runaway overheating.
For stakeholders conducting a Nebraska multi-family feasibility study, Omaha offers a case study in fundamentals-driven success. The data-backed outlook suggests cautious optimism – near-term softness in the luxury segment may occur, but the mid- and long-term prospects remain strong as the city continues to attract jobs and residents. Investors can find stable returns, lenders see solid metrics, and developers with the right product in the right location can still prosper. In summary, Omaha’s multi-family market demonstrates resilience and adaptability, proving that in real estate, local economic engines like job growth can override macro headwinds and keep the outlook decidedly positive.
June 29, 2025 by Collective of authors at MMCG Invest, LLC, multi-family feasibility study consultant
Sources:
MMCG Database
U.S. Bureau of Labor Statistics (BLS).“State and Area Employment, Hours, and Earnings – Omaha‑Council Bluffs, NE‑IA MSA (Series ID CES3100000001).”
Current Employment Statistics, May 2025 release.
Key data: Monthly job additions (+5,700 in May), 3-month rolling growth (+2.6%), sector-level year-over-year changes.
Accessed: July 1, 2025.
BLS.“Metropolitan Area Employment and Unemployment – May 2025 (USDL-25-1123).”
Released June 21, 2025.
Highlights: Omaha unemployment rate (3.1%) vs. U.S. average (4.2%).
BLS.“Local Area Unemployment Statistics — Omaha‑Council Bluffs, NE‑IA MSA (Series LAUMT312050000000004).”
Seasonally adjusted data.
Context: Historical unemployment trends.
Accessed: July 1, 2025.
Oxford Economics.“Omaha Employment by Industry in Thousands: Current, 10-year History, 5-year Forecast.”
Dataset as of June 2025.
Includes: Location quotients and projected job growth by sector.
Reproduced in MMCG report, p. 18.
City of Omaha Planning Department.“Mutual of Omaha Headquarters & Modern Streetcar Redevelopment Plan.”
Final staff report, January 2024.
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