Median home: $215,000 | Mortgage rate: 7.1% | Property tax: 1.5% | Insurance: $1,100/yr
Iowa is one of the most affordable housing markets in the Midwest. With a median home price of $215,000 and mortgage rates averaging 7.1%, understanding what you can afford before house hunting is essential.
The 28/36 rule is the gold standard: spend no more than 28% of gross income on housing and no more than 36% on total debt. In Iowa, with a property tax rate of 1.5% and average insurance of $1,100/year, these costs add significantly to your monthly payment beyond just principal and interest.
A 20% down payment on the median Iowa home requires $43,000. FHA loans with 3.5% down need just $7,525, but you will pay mortgage insurance. Iowa offers a Homestead Tax Credit that reduces assessed value for primary residences.
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Based on the 28/36 rule, your total housing payment should not exceed 28% of gross monthly income, and total debts should stay under 36%. In Iowa, with median home prices at $215,000, you typically need a household income of at least $215,000 to afford the median home.
To afford the median Iowa home at $215,000 with 20% down at 7.1% interest, you need approximately $49,538 annual household income. This is based on the 28% housing cost guideline.
The median home price in Iowa is approximately $215,000 as of 2026. Prices vary significantly by city and county. Iowa is one of the most affordable housing markets in the Midwest.
A 20% down payment on the median Iowa home ($215,000) is $43,000. FHA loans allow 3.5% down ($7,525) and VA loans offer 0% down for eligible veterans.
Iowa has a property tax rate of 1.5%, which is near the national average. On the median home, that is $3,225/year. Iowa offers a Homestead Tax Credit that reduces assessed value for primary residences.