South Dakota Mortgage and Refinance Rates

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Point of Interest

Are you thinking of buying or refinancing a home in South Dakota? There are plenty of low-interest rate loans available through private lenders, but you’ll find some of the best rates in South Dakota if you qualify for a mortgage through the South Dakota Housing Development Authority.

Average 30-year Fixed Rate: 3.81%

Use our mortgage calculator to find the right mortgage for your income.

TermRateRate Last Week
30-year fixed3.81%3.81%
30-year refinance3.85%3.85%
15-year fixed3.42%3.48%
5/1 ARM4.03%4.03%
30-year fixed jumbo4.06%4.06%
 

Moving to South Dakota is a great option for people who want to enjoy beautiful landscapes, one of America’s most famous landmarks and the wide-open space of the upper Midwest. Mortgage rates in South Dakota are currently at all-time lows and are very comparable to rates in other states.

If you want to have a taste of the city, you can choose to buy property in either Rapid City or Sioux Falls, but if small communities and wide-open spaces are what you seek, the rest of South Dakota is waiting for you.

Getting a mortgage in South Dakota

With fewer than 900,000 people in the state, most towns in South Dakota are small and distant from others. However, South Dakota’s population is growing — along with its job opportunities. The South Dakota Department of Labor and Regulation estimated in its September 2018 e-Labor Bulletin that the state’s job market will grow by 6.8% by 2026.

South Dakota ranked eighth for states people are moving to, according to the United Van Lines’ 2019 National Movers Study. If you’re considering helping the state stay near the top of the list, you’ll find low mortgage rates in South Dakota, along with several state mortgage programs to help you qualify for a loan. These programs make the upfront costs more manageable while allowing you to pay off your loan quickly.

  1. Median home price: $159,100
  2. Average 30-year fixed rate: 3.81%
  3. Median monthly mortgage cost: $1,298
  4. Homeownership rate: 68.1%

South Dakota state mortgage rate trends

Mortgage and refinance rates in South Dakota have been on the downward slope for the last couple of years. After reaching nearly 5% for a 30-year fixed-rate loan in late 2018, rates slowly dropped throughout 2019 to where they are currently — which is near record lows. This trend tracks very closely to trend across the United States.

The Federal Reserve Bank raised its funds rate to 2.25% to 2.5% in December 2018 before slowly decreasing it to 0% to 0.25%, where it sits today. Mortgage rates, while not directly tied to the Fed’s interest rates, tend to follow the Fed’s trends when rates go up or come down, although consumer demand for home loans also plays a large role in the increase and decrease of mortgage and refinance rates.

South Dakota state current mortgage rates

Current mortgage rates in South Dakota are near the lowest they’ve ever been. The COVID-19 pandemic has caused rates to drop significantly and experts expect the record lows to stick around for some time — perhaps even into 2021 — making it a great time to either buy or refinance a home in South Dakota.

The average 30-year fixed-rate mortgage loan is currently 3.81% in South Dakota, and 30-year refinance rates are currently 3.85% on average. If you’re looking for something with a shorter term, 15-year fixed-rate loans currently have 3.42% interest rates on average. The rate you receive will depend heavily on your credit history, of course, but pre-qualifying with multiple lenders will help you understand what kind of rate you can expect and help you choose a loan with the best terms for your situation.

Most and least expensive places to live in South Dakota

Many of South Dakota’s residents live in the three counties that are home to the state’s largest cities — Sioux Falls and Rapid City. Home prices are, on average, significantly higher in these counties than in the rest of the state, which is more sparsely populated.

5 most expensive

  • Lincoln County — Lincoln County includes the southern portion of Sioux Falls and has a median home value of $218,400. 
  • Custer County — Custer County, in the southwest corner of South Dakota, has a median home value of $216,800.
  • Lawrence County — Lawrence County is located northwest of Rapid City and has a median home value of $203,000.
  • Meade County — Meade County includes the northern portion of Rapid City, where the median home value is $180,500.
  • Pennington County — Pennington County stretches from South Dakota’s western border to Badlands National Park, which includes Rapid City. The median home value here is $179,900.

5 least expensive

South Dakota state mortgage resources and intricacies 

If you’re ready to buy a house in South Dakota, you should start by checking out the state resources available to homebuyers. If you haven’t owned a house in the last three years, you can benefit from the first-time homebuyer loan program offered by the South Dakota Housing Development Authority (SDHDA). This program offers incredibly low interest rates and downpayment assistance to those who qualify. The current rate for a 30-year fixed-rate loan backed by the government is 2.75% — much lower than the state average for conventional loans.

Repeat homebuyers can also benefit from SDHDA programs. If your household income is less than $93,360 for a family of two or fewer or $105,420 for a family of three or more, you can qualify for a low fixed-rate mortgage through the repeat homebuyer program. The home you purchase has to be less than $336,000 to qualify, though. You’ll have to apply with a participating lender for both mortgage programs through SDHDA, and the lender will help you navigate the process.

Finally, you shouldn’t run into any trouble with property taxes in this state. South Dakota uses a simple system that allows counties and municipalities to set their own tax rates, which are applied to the full assessed value of a property. 

The final word

New mortgage and refinance rates in South Dakota near all-time lows, and you likely won’t find a better time to settle into the Mount Rushmore State. You can compare rates from these trusted lenders to help save as much money as possible over the life of your mortgage.

Trevor Wallis

Contributing Writer

Author Information: Trevor Wallis is a freelance content writer helping marketing and personal finance companies share their wealth of knowledge with the world. You can read his rants about cash and coffee on Twitter.