Median home: $265,000 | Mortgage rate: 7.1% | Property tax: 1.08% | Insurance: $1,200/yr
South Dakota is a tax-friendly Plains state with no income tax. With a median home price of $265,000 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 South Dakota, with a property tax rate of 1.08% and average insurance of $1,200/year, these costs add significantly to your monthly payment beyond just principal and interest.
A 20% down payment on the median South Dakota home requires $53,000. FHA loans with 3.5% down need just $9,275, but you will pay mortgage insurance. South Dakota has no income or corporate tax. Property taxes fund most local services.
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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 South Dakota, with median home prices at $265,000, you typically need a household income of at least $265,000 to afford the median home.
To afford the median South Dakota home at $265,000 with 20% down at 7.1% interest, you need approximately $61,059 annual household income. This is based on the 28% housing cost guideline.
The median home price in South Dakota is approximately $265,000 as of 2026. Prices vary significantly by city and county. South Dakota is a tax-friendly Plains state with no income tax.
A 20% down payment on the median South Dakota home ($265,000) is $53,000. FHA loans allow 3.5% down ($9,275) and VA loans offer 0% down for eligible veterans.
South Dakota has a property tax rate of 1.08%, which is near the national average. On the median home, that is $2,862/year. South Dakota has no income or corporate tax. Property taxes fund most local services.