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Home Mortgage Rates in Delaware

Delaware Bay Fishing Pier.

The state of Delaware is found in the Northeastern part of the United States, and it has the state motto of “Liberty and Independence.” Delaware was also one of the original thirteen colonies, and it became the first colony to ratify the Constitution. This fact is the reason why Delaware is known as “The First State” - it was the first state admitted to the union when it was admitted on December 7, 1787. It got its name from Thomas West who was the Baron De La Warr, as well as Virginia's first colonial governor. It is the second-smallest state in the nation behind Rhode Island, with an area of just under 2,500 square miles.. While small, it is densly populated, and it has the ninth biggest population of millionaires in the United States. The state has the 14th highest per capita income in the state and is the headquarters to over 50% of the country’s 500 largest companies.  Delaware is a very popular attraction to large companies because the state offers a tax haven that is not available in other states. 

Delaware is home to several larger cities along with smaller communities and beach towns. However, everywhere in the state is densely populated, and you'll get a small-town feel no matter where you choose to live. The smaller beach communities have a thriving tourism trade, and the cities are very fast-growing with dozens of employment opportunities. Overall, the state of Delaware has a relatively healthy economy. 

People move to Delaware for its scenery, thriving and diverse economy, education opportunities, and the small-town vibe. As this is the second-smallest state, people are drawn here for the friendly, tight-knit communities that dot the state. There is also no sales tax in Delaware, and it has one of the top ten lowest property tax rates in the nation. The education opportunities are another reason Delaware is a popular state as Delaware is home to eight universities and colleges, both public and private.

People move out of Delaware in order to find larger cities and higher paying job opportunities that have room for advancement. Delaware also has a higher cost of living, and this can send people to other states in search of more affordable living opportunities. They may also leave in an attempt to find better living opportunities that are closer to their jobs as Delaware's traffic is some of the worst in the nation.

People who are looking for a place that is diverse and has large cities and more scenic areas find Delaware attractive. Also, retirees and older people who are looking for career changes find Delaware attractive. The steady economy and the varied living opportunities make this area attractive to people who are ready to settle down and live out the rest of their lives right before their retirement and after they retire.

Delaware Real Estate Trends

Historical Trends Before The 2008 Housing Crisis

The start of the 1990s saw Delaware's real estate market in a stagnant state. It wasn't gaining ground, and it wasn't dropping. This trend continued throughout much of the 1990s until the end of 1997. Once the end of 1997 came, the real estate market started to show signs of improving, and it started on a steady upward climb. This trend continued uninterrupted until the middle of 2003 when the market started to climb at a more steep rate. The third quarter of 2004 saw a very slight increase in sales, but this evened out. The market was still climbing at a rapid pace, and it continued in this fashion until the second quarter of 2006.

Wilmington had a slightly different historical real estate trend. While this market also experienced a moderately steady pace throughout the early 1990s, it had a few slight peaks and drops in 1992, 1994, 1995 and 1998. This trend continued until the first quarter of 2000 when the market started on a steeper climb. The housing market climbed at a rapid pace without any large deviations until the first quarter of 2006. This is the period where the housing market slowed down and showed signs of the impending housing market crash.

Homeownership across the state has historically exceeded the national average by a significant margin. Over the past 33 years the low was put in during 1990 at 67.7%. Ownership peaked at 77.3% in 2004. Since the recession ownership has fell moderately to 73% in 2016. The local rate of ownership and the overall trend compares favorably to the nationwide trend, which stood at 64% in 1994, peaked at 69% in 2004 and fell to 63.4% in 2016.

During the 2008 Housing Crisis

Delaware's housing market experienced a gradual descent during the housing market crash. The second quarter of 2006 saw Delaware's housing market gradually start to slow down, but it continued to climb. It rose into a gradual peak in the second quarter of 2007, and this was the highest point it reached before beginning to go down. Between the second and third quarters of 2007, the market peaked and dropped sharply. However, this drop leveled off in the fourth quarter of 2007 into a more gradual fall. This gradual fall continued until the fourth quarter of 2008 when the market went into a short, sharp peak. This peak fell away into a more rapid drop from the first to the third quarter of 2009 before leveling out again. The third quarter brought the start of another slight peak that ended in the market's lowest point in the second quarter of 2012.

Crisis Recovery

Once Delaware's market hit this low point in 2012, it started up on a very gradual climb. This continued until the third quarter of 2014 when the market went into its first peak since it hit bottom in 2012. This peak fell away only to go into another short peak during the first quarter of 2015. This peak fell away to a more gradual climb that continued until it saw another slight increase at the end of 2016. This leveled off again, and the market has been on a steady climb ever since. However, Delaware's housing market is still way below the point it was at before the bottom dropped out of the housing market.

In comparison, Wilmington's real estate market experienced a slightly steeper fall. The first quarter of 2006 was the first time the housing market started to show signs of trouble when the market went from a quick climb to a more sedate pace. This ended in a very small peak in 2006, and this peak quickly dropped off to rise into the highest peak the housing market saw in the second quarter of 2007. This peak dropped only to rise into another shorter peak in the fourth quarter of 2007. This fell away again, and Wilmington's housing market started on a more gradual descent that rose into another small peak in the first quarter of 2009. As soon as this peak started to fall, it started to fall at a more rapid pace that leveled out by the third quarter of 2010. This market went into one more slight peak in the fourth quarter of 2011 before settling into its lowest point.

The second quarter of 2012 marked Wilmington's real estate market's lowest point. However, the market didn't stay at this low point, and it began to climb at a very steady, slow pace until it dropped off slightly in the first quarter of 2015. The market recovered from this slight setback quickly, and it has been on a steady climb ever since. However, Wilmington's market is and the broader state took until the thrid quarter of 2020 for home prices to get near the 2007 high.

Oceanfront Property

Like most states located in the Northeastern party of the country, the median housing price in Delaware is higher than the overall national average. According to Zillow , the median home value in Delaware was $274,067 at the end of November 2020, while the median home value nationwide was $262,604.   Delaware’s average listing price and median sales price are comparable to other states located in the Mid Atlantic and North Atlantic including Maryland, and Virginia. New Jersey and Connecticut are also priced similarly to Delaware if you exclude the impact of cities like Bridgeport and the metro New York City region.

One reason why Delaware’s home prices are slightly higher than the national average is the fact that much of the land is located on the sea.  Oceanfront homes almost always sell more than homes that are located inland.  Also, the fact that Delaware is such a densely populated state drives up the demand for housing and pushes up real estate prices. 

COVID-19 Impacts on the Delaware Real Estate Market

Through the first 3 quarters of 2020 real estate held up far better than it did during the 2008 housing recession. Central banks and politicians reacted faster and much more aggressively to the COVID-19 crisis than they did to the 2008 recession. Many novel and unconventional policies which began in response to the prior recession were used much more aggressively in this recession. For instance, here are some of the policies which were enacted:

  • The Federal Reserve quickly dropped the Fed Funds Rate to zero while suggesting they would buy an unlimited number of Treasury securities and mortgage-backed securities to keep those markets functional.
  • In 4 months the Federal Reserve expanded their balance sheet by over $3 trillion from $4 trillion to over $7 trillion.
  • The Federal Reserve offered forward guidance stating they were unlikely to lift interest rates through 2023.
  • Unemployment benefits were extended in duration, amount, and to people who previously could not qualify for unemployment like self-employed people.
  • The CARES act was a $2.2 trillion economic stimulus bill. It prohibited evictions for lack of rent payment and prohibited foreclosures for lack of mortgage payments while allowing homebuyers to payment forebearance for up to 360 days.
  • In the 2008 economic criss the FASB did not relax mark-to-market accounting rules until April, 2009. In 2020 domestic & international regulators worked much more quickly to adjust financial reporting requirements.

On November 24, 2020 the Federal Housing Finance Agency (FHFA) raised conforming loan limits by 7.42%, reflecting strong annual growth in the nationwide FHFA House Price Index (HPI).

Places to Live

Metropolitan Areas

DE Rank US Rank Geography 2016 Pop 2010 Pop Change % △
1 7 Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Metro Area 6,070,500 5,965,343 105,157 1.76%
2 135 Salisbury, MD-DE Metro Area 400,200 373,802 26,398 7.06%
3 241 Dover 174,827 162,310 12,517 7.71%

Popular Cities in Delaware

Delaware is home to several fast-growing cities that have diverse economies and many attractions for younger people as well as older working professionals.


Wilmington, Delaware Waterfront.

The largest city in Delaware has 71,442 people, and Wilmington was built on the site of the first Swedish settlement in the nation. Wilmington's population makes it the most populous city in the state but the fifth least populous city in the United States. This city is also part of the Philadelphia-Camden-Wilmington Metro, and this Metro has a population of 6,070,500 people. This city has a very rich history, and you'll find French, British, and Swedish influences throughout the city.

The city was first incorporated in the year 1731, making it one of the oldest chartered cities in the country.  There is much demand for housing in Wilmington as there many major companies that are headquartered in the city.  Many major credit card issuers including Chase Card Services, Bank of America, and Barclays Bank of Delaware are all headquartered in the city.  The government, finance, healthcare, and education make up large portions of Wilmington's economy. It is one of the most accessible cities in the state of Delaware, and this plays a large part in the economic strength of the city. Additionally, the large arts community, retail, and the service industry also help the economy while attracting many tourists.

Wilmington has a warm temperate climate zone, and this climate zone has hot, humid summers with winter months that are cool to cold. July is the hottest month of the year with temperatures in the high 90s and frequent thunderstorm activity that can be severe. December and January are the coldest months of the year with temperatures in the 20s and moderate amounts of snow.

One of the most popular places to live in Wilmington is along the Wilmington Riverfront.  Wilmington sits on the Christina River and in recent years much development has taken place in that area.  Justison Landing, which is located near the river, is a new & popular residential development located in Wilmington.  The Wilmington Riverfront also houses many outlet shops and restaurants.  You'll find several museums, gardens, ethnic festivals, galleries, and events in Wilmington. The Delaware Art Museum has several extensive exhibits on nineteenth through the twenty-first-century artists. The second week of June sees six blocks closed down for the annual Italian Festival. Tourists can also enjoy the week-long outdoor music festival, the Clifford Brown Jazz Festival. The Wilmington Ballet also puts on performances all throughout the year.

Wilmington is home to several public and private elementary, middle, and high schools. You'll also find a few alternative schools in the area. The University of Delaware has a campus here, as well as Drexel University. Students can also attend the Delaware College of Art & Design or the Delaware Technical & Community College.

Wilmington's economy is largely supported by its largest employer, and the biggest employer is the State of Delaware with 13,000 employees. The second biggest employer in the city is Christiana Health Care System, and it has 10,400 staff members. Finally, the third biggest employer in Wilmington is the Bank of America with 7,900 employees.

Despite this diverse economy, Wilmington has an unemployment rate that is over 2% higher than the national average. However, this may change soon as the city's economy has seen over 4% in local job growth in the past year. Going forward, the city plans to add over 41% more jobs to the economy in the next ten years.

The local median home price for Wilmington is $140,200, and this averages out to a price per square foot of around $105. These prices have increased over the past year by 6%, and they're estimated to grow by another 2.7% in the coming year.


Delaware Capital Building.

Dover is the second biggest city in Delaware as well as its capital city, and you can find it along the St. Jones River. As of 2016, Dover had a population of 37,786 people, and it is also part of the larger Dover Metro's population of 174,827 people. Dover got its name from William Penn, who named the city after his home city of Dover in Kent, England. This city was established in 1693, and it was an important stop for the Underground Railroad. The city has been the state capital of Delaware since 1777.

Dover has a very large government influence in its local economy due to the fact that is is the capital of Delaware. It also has a lower cost of living, and this is working to make it one of the fastest growing cities in the state. The economy is also supported by retail, education, healthcare, and transportation. All of these economic sectors work to make a very stable economy. Due to the low cost of living, the Dover metro area is one of the fastest growing areas in the state.  Outside of the state government, many Dover area residents are employed by the US military.  The Dover Airforce Base employs many military personnel as well as civilians who support the base.  Also, Proctor & Gamble and Kraft Foods each have major manufacturing facilities in the area.

Dover is a city that has a warm temperate climate that has very hot and humid summer months and cool winter months with little snowfall. June through August are the hottest months of the year with temperatures in the 80s and high humidity. January and February are the coolest months with temperatures staying around the 30s.

The Schwartz Center for the Arts is a popular venue that shows ballet, classical music performances, and classic movies. You can also spend an afternoon browsing through the Delaware State Museum, or visit the Dover International Speedway, which draws thousands of people to view Nascar races every year. The Children's Theatre, Inc is here and it hosts various performances year-round.

Dover is also home to several public and private universities including two and four-year institutions. Delaware State University is here, and it is a land-grant university and Delaware's only historically black university. The Delaware Technical Community College has a campus in Dover, and Wilmington University has a satellite campus here as well.

As with Wilmington, the State of Delaware is the largest employer in Dover with 13,000 employees. The city's second-biggest employer is the Dover Air Force Base with 4,000 staff members. Finally, the third biggest employer found in Dover is Delaware State University with 2,100 staff members.

Even though this city's economy has several large companies and a huge government influence, the unemployment rate is still higher than the national average. However, this may improve as the city has seen over 3% growth in the past year. Going forward over the next ten years, Dover's economy is estimated to grow at least another 39% in the coming years.

Dover has a local median home price of $165,400, and it averages out to a price per square foot of $103. These prices have increased by 1.1% in the past year, and they're estimated to increase by another 2.1% in the coming year. The Dover Metro has a local median home price of $175,000 and an average price per square foot of $119.


Christiana Hospital in Newark, Delaware.

Newark claims the title of the third biggest city in the state of Delaware with a population of 33,398. Newark was first founded in 1694, and it was the recipient of a charter from George II of Great Britain. This city is very rich in history, and this rich history still has ties to the present day city.

Newark was built around the education industry with the first grammar school being founded in 1743, and this trend still has heavy influences in the local economy. Manufacturing also played a large role, along with healthcare, transportation, finance, and the service industry. All of these industries combine to make a diverse economy with plenty of job growth. The city is also close to the Maryland border.

This city enjoys a warm temperate climate with long, humid, and hot summer months, wet spring months, and cool fall and winter months. The city sees a moderate amount of precipitation year round, and this contributes to the high humidity levels. July is usually the hottest month, and Newark sees temperatures in the 80s. January or February are the coldest months in Newark with temperatures in the 30s.

Tourists can enjoy several large parks, museums, cultural points of interest, and performances throughout Newark. You can spend the day browsing through the Mineralogical Museum or go for a horseback ride through Carousel Park. The University of Delaware Botanic Gardens is also another large tourist attraction in Newark.

The Christina School District serves this city, and it has ten schools with one charter school that has thousands of students enrolled. The city is also home to the University of Delaware, and this college is one of the top-ranked universities in the nation with dozens of majors and courses of study for students to choose from.

Newark has long had a history with education, and this reflects in the city's two biggest employers. Newark's biggest employer is the Christina School District with over 1,200 year-round staff members. The city's second-largest employer is the University of Delaware with over 1,000 staff. Finally, the employer that rounds out the top three biggest in Newark is the City of Newark itself with 800 employees.

The economy is doing well even though it has an unemployment rate that is slightly above the national average. It has had decent job growth over the past year of over 4%, and this could help the current unemployment rate. Over the next decade, Newark's economy is set to improve even further as it is estimated to add around 41% more jobs to the local economy.

Newark has a local median home price of around $233,200, and this price averages out to a price per square foot of $133. These prices have risen over the past year by over 8%, and these prices are projected to rise by another 2.4% in the coming year.


Middletown is the fourth biggest city in the state of Delaware with a population of 20,876 people. This city is located in New Castle County, and this city has experienced rapid growth in the past ten years. This rapid growth prompted the city to establish a police force in 2007, and the rise of more affluent housing has drawn people from larger cities to Middletown.

The local economy in this city is supported by several diverse sectors including education, transportation, healthcare, and retail. The service-based industry has also experienced a rise in strength as several new grocery stores, restaurants, and cafes have opened in the downtown area recently.

Middletown has a humid temperate climate that has cool, mild winters and very hot summers with a high humidity level. The end of July into the start of August is typically the hottest time of the year with temperatures in the 80s. The colder months fluctuate between January and February with temperatures in the 30s. The spring temperatures are cooler with rainfall.

This city is home to several cultural attractions, museums, events, and festivals that go on year-round. The Olde Tyme Peach Festival takes place in August, and this event draws thousands of tourists each year to visit multiple artist booths, music performances, and performing arts groups. The M.O.T. Big Ball Marathon takes place each year to raise money for various charities, or you can visit the Firefly Music Festival.

The Appoquinimink School District serves this city, and it has over 500 students enrolled. It recently expanded and built a new elementary school to accommodate the recent growth. There are also private and boarding schools located in this city. For secondary education, students can attend Wilmington University.

The biggest employer in the city comes from the education sector, and Wilmington University has over 1,350 staff. The second-biggest employer in Middletown is an Amazon warehouse that has over 1,000 staff members. The third biggest-employer is the Appoquinimink School District with 500 staff.

The local economy is doing well, and the unemployment rate in Middletown is below the national average. It has also had a recent growth in the job market with over 4% more jobs being added. To add to this, the city is estimated to add another 43% more jobs in the next ten years.

Middletown has a local median home price of $263,200, and this averages out to a price per square foot of $131. These prices have increased over the past year by 6.4%, and they're projected to increase by another 2.7% in the coming year.

Delaware Census Data

According to the United States Census an estimated 952,065 people live in the state of Delaware. The state has 1948.54 mi² of land area, which gave it a population density of 488.6 per mi². Here is a list of cities, towns, villages & Census Designated Places with their estimated population as of June 2016 & the 2010 United States Census. For Census Designated Places (CDP) where there was no population estimate available for 2016 the 2011-2015 American Community Survey 5-Year Estimates data was used.

All table columns are sortable. Click on the column headers to sort by that column. Click again to sort low to high. Cities with higher levels of population growth typically see the increased demand drive faster real estate price appreciation.

Rank Geography County 2016 Pop 2010 Pop Change % △ Land mi² Pop Den mi²
1 Wilmington New Castle 71,442 70,851 591 0.83% 10.9 6,554.31
2 Dover Kent 37,786 36,047 1,739 4.82% 23.15 1,632.22
3 Newark New Castle 33,398 31,454 1,944 6.18% 9.19 3,634.17
4 Middletown New Castle 20,876 18,871 2,005 10.62% 11.61 1,798.11
Bear CDP New Castle 19,886 19,371 515 2.66% 5.71 3,482.66
Glasgow CDP New Castle 14,640 14,303 337 2.36% 9.93 1,474.32
Brookside CDP New Castle 13,743 14,353 -610 -4.25% 3.95 3,479.24
Hockessin CDP New Castle 13,230 13,527 -297 -2.20% 10.04 1,317.73
5 Smyrna Kent & New Castle 11,371 10,023 1,348 13.45% 5.93 1,917.54
6 Milford Sussex & Kent 10,979 9,559 1,420 14.86% 9.45 1,161.80
Pike Creek Valley CDP New Castle 10,672 11,217 -545 -4.86% 2.58 4,136.43
Claymont CDP New Castle 9,060 8,253 807 9.78% 2.15 4,213.95
Pike Creek CDP New Castle 8,463 7,898 565 7.15% 2.76 3,066.30
Wilmington Manor CDP New Castle 7,912 7,889 23 0.29% 1.55 5,104.52
7 Seaford Sussex 7,736 6,928 808 11.66% 5.21 1,484.84
North Star CDP New Castle 7,596 7,980 -384 -4.81% 6.8 1,117.06
8 Georgetown Sussex 7,206 6,422 784 12.21% 5.04 1,429.76
Edgemoor CDP New Castle 6,257 5,677 580 10.22% 1.87 3,345.99
9 Elsmere New Castle 6,106 6,131 -25 -0.41% 1.01 6,045.54
10 New Castle New Castle 5,357 5,285 72 1.36% 3.4 1,575.59
11 Millsboro Sussex 4,293 3,877 416 10.73% 3.71 1,157.14
12 Laurel Sussex 4,160 3,708 452 12.19% 2.89 1,439.45
Rising Sun-Lebanon CDP Kent 3,970 3,391 579 17.07% 3.39 1,171.09
Highland Acres CDP Kent 3,966 3,459 507 14.66% 1.5 2,644.00
13 Harrington Kent 3,679 3,562 117 3.28% 2.75 1,337.82
14 Camden Kent 3,489 3,464 25 0.72% 3.7 942.97
Dover Base Housing CDP Kent 3,417 3,450 -33 -0.96% 0.69 4,952.17
15 Clayton Kent & New Castle 3,157 2,918 239 8.19% 1.84 1,715.76
16 Lewes Sussex 3,074 2,747 327 11.90% 3.8 808.95
17 Milton Sussex 2,879 2,576 303 11.76% 1.8 1,599.44
Riverview CDP Kent 2,863 2,456 407 16.57% 3.61 793.07
18 Selbyville Sussex 2,421 2,167 254 11.72% 3.39 714.16
Greenville CDP New Castle 2,378 2,326 52 2.24% 2.74 867.88
Long Neck CDP Sussex 2,359 1,980 379 19.14% 2.58 914.34
19 Townsend New Castle 2,313 2,049 264 12.88% 1.05 2,202.86
20 Bridgeville Sussex 2,302 2,048 254 12.40% 4.65 495.05
Kent Acres CDP Kent 2,283 1,890 393 20.79% 0.84 2,717.86
21 Ocean View Sussex 2,076 1,882 194 10.31% 2.45 847.35
Woodside East CDP Kent 2,027 2,316 -289 -12.48% 1.7 1,192.35
22 Delmar Sussex 1,765 1,597 168 10.52% 1.77 997.18
23 Delaware City New Castle 1,742 1,695 47 2.77% 1.23 1,416.26
Rodney Village CDP Kent 1,586 1,487 99 6.66% 0.59 2,688.14
24 Rehoboth Beach Sussex 1,488 1,327 161 12.13% 1.18 1,261.02
25 Wyoming Kent 1,486 1,313 173 13.18% 1.06 1,401.89
26 Cheswold Kent 1,425 1,380 45 3.26% 1.29 1,104.65
27 Felton Kent 1,408 1,298 110 8.47% 0.82 1,717.07
28 Blades Sussex 1,380 1,241 139 11.20% 0.56 2,464.29
29 Bethany Beach Sussex 1,194 1,060 134 12.64% 1.15 1,038.26
30 Bellefonte New Castle 1,178 1,193 -15 -1.26% 0.18 6,544.44
St. Georges CDP New Castle 1,141 1 1,141.00
31 Greenwood Sussex 1,085 973 112 11.51% 0.72 1,506.94
32 Newport New Castle 1,050 1,055 -5 -0.47% 0.44 2,386.36
33 Frankford Sussex 951 847 104 12.28% 0.73 1,302.74
34 Dagsboro Sussex 878 805 73 9.07% 1.36 645.59
35 Frederica Kent 828 774 54 6.98% 1.92 431.25
36 Millville Sussex 602 544 58 10.66% 2.5 240.8
37 South Bethany Sussex 508 449 59 13.14% 0.51 996.08
38 Arden New Castle 450 439 11 2.51% 0.26 1,730.77
39 Fenwick Island Sussex 426 379 47 12.40% 0.33 1,290.91
40 Ellendale Sussex 423 381 42 11.02% 0.44 961.36
41 Houston Kent 393 374 19 5.08% 0.33 1,190.91
42 Dewey Beach Sussex 379 341 38 11.14% 0.33 1,148.48
43 Odessa New Castle 372 364 8 2.20% 0.51 729.41
44 Bowers Kent 360 335 25 7.46% 0.29 1,241.38
45 Ardentown New Castle 273 264 9 3.41% 0.1 2,730.00
46 Kenton Kent 265 261 4 1.53% 0.19 1,394.74
47 Ardencroft New Castle 237 231 6 2.60% 0.16 1,481.25
48 Magnolia Kent 235 225 10 4.44% 0.12 1,958.33
49 Little Creek Kent 234 224 10 4.46% 0.14 1,671.43
50 Slaughter Beach Sussex 233 207 26 12.56% 1.36 171.32
51 Leipsic Kent 196 183 13 7.10% 0.29 675.86
52 Woodside Kent 196 181 15 8.29% 0.16 1,225.00
53 Bethel Sussex 192 171 21 12.28% 0.4 480
54 Viola Kent 171 157 14 8.92% 0.18 950
55 Henlopen Acres Sussex 138 122 16 13.11% 0.26 530.77
56 Farmington Kent 118 110 8 7.27% 0.08 1,475.00
57 Hartly Kent 71 74 -3 -4.05% 0.06 1,183.33

Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2016
Source: U.S. Census Bureau, Population Division
Release Date: May 2017.

Qualifying for a Home Loan in Delaware

Conforming Mortgages

As of 2024 the conforming loan limit across the United States is set to $766,550, with a ceiling of 150% that amount in areas where median home values are higher. Local affordability makes the $766,550 ceiling apply across the state for single unit homes. Dual unit homes have a limit of $981,500, triple unit homes have a limit of $1,186,350 & quadruple unit homes have a limit of $1,474,400. Home buyers who are borrowing more than the above amounts to purchase premium properties will likely need to obtain a jumbo mortgage. Jumbo loans typically have a slightly higher rate of interest than conforming mortgages, though spreads vary based on credit market conditions.

Several different types of home loans are available in the Liberty and Independence State. Fixed-rate loans are very common, and the terms include thirty, twenty, fifteen, and ten years. The longer the life of the mortgage, the lower the monthly payment will be, which is why the 30-year loan is the most popular. The downside of this, however, is that the APR is higher compared to shorter-term loans. The difference can be as large as a full percentage point.

In addition to conventional 30-year and 15-year fixed-rate mortgages, lenders offer a wide variety of adjustable rate mortgages (ARM’s). While these instruments have lost some of their attractiveness during the recession, there are still circumstances where they offer the only way for a borrower to qualify. Properly structured (that is, with strict limits on how much the rate can fluctuate), such loans are still a legitimate way for borrowers to purchase a home and start building equity while establishing their credit so as to qualify for conventional loans upon the ARM’s expiration. These loans provide interest rates that fluctuate, as the name implies. The APR is usually fixed for an initial term, such as three, five, seven or ten years. Then the rate adjusts depending on the performance of a referenced index rate, usually once per year; but it can change more frequently. The loan agreement may state in detail how frequently the APR can change, and it may also include a rate cap to prevent large changes.

Balloon mortgages are another route for aspiring homeowners. Balloon mortgages are when a large portion of the borrowed principle is repaid in a single payment at the end of the loan period. Balloon loans are not common for most residential buyers, but are more common for commercial loans and people with significant financial assets.

A few lenders in the state offer interest-only loans, but usually only for periods of three years. These are mortgages where payments are applied only to interest for a period of time. The loan's principal isn't paid down, so the monthly payments are very low. The low monthly payments only lasts a few years, however. Typically, it's about three years. After this period, monthly payments spike because the loan's principal hasn't been reduced & the remainder of the loan must be paid off in a compressed period of time. For example, on a 3 year IO 30-year loan, the first 3 years are interest only payments, then the loan principal must be paid in full in the subsequent 27 years.

When qualifying for a loan, a credit score of 720 or better can help secure a favorable loan. Some mortgage lenders have approved borrowers with credit scores around 640. The best rates and deals will be obtained with a score above 740. There is a lot of competition among lenders, and this environment can create nice perks for borrowers. For example, some banks will offer special deals on closing costs for borrowers who qualify. The cost might be added to the mortgage or the bank will pay the closing costs but add a few basis points to the APR.

A debt-to-income ratio of 40% and a down payment of 20% are what most banks want to see on a home loan application. They will accept worse numbers, but fees and APR's could go up as a result. Also, a down payment of less than 20% typically results in required mortgage insurance. This down payment requirement does not apply for Federal assistance programs such as FHA, in which applicants can have a lower credit score and income but still receive financing.

The piggyback loan is another type of mortgage which is simply two mortgages in one. The piggyback loan can eliminate the need for private mortgage insurance by covering 80% of the home's value with the first loan, while the second loan helps to pay for part of the down payment.

Government Programs

Federal Assistance Programs

Prospective home buyers who don't find what they're looking for at one of the state's private banks may want to take a look at some of the mortgage options the federal government offers. One of them is the loan program at the Veterans Administration, which provides mortgages with zero down. On top of that great deal, VA loans do not require private mortgage insurance. The agency does, however, charge a funding fee, and this varies from 1.2% to 3.3%. Making a voluntary down payment will reduce this charge. And in case you're wondering, yes you do have to be a qualified veteran to get one of these unbeatable deals.

If you're not a vet, you may want to consider the Federal Housing Administration's home loan services. The FHA offers loans to people who have a credit score of at least 580 and who can put at least 3.5% down. The government agency also offers mortgages for lower credit scores, but it requires more money down with these loans.

USDA loans can help people with low incomes in rural parts of the state qualify for a subsidized low-interest loan. Given the low population density throughout most of the state, most areas qualify.

Delaware Home Loan Programs

Delaware has several home loan programs that are designed to help first-time homebuyers and low-income applicants obtain an affordable home loan.

Welcome Home Loan Program
The Welcome Home Loan Program is run by the Delaware State Housing Authority. It is designed to help first-time homebuyers get a mortgage that has a lower interest rate than a conventional mortgage loan. This mortgage comes with a 30-year term with fixed interest rates.

Any applicants for this program will have to meet certain eligibility requirements including falling inside of the household income limits and meeting the purchase price limits for the home you want to purchase. These rates do fluctuate from county to county, so it is a good idea to contact your local provider. Additionally, the applicants will have to work with a participating provider.

Second Mortgage Assistance Loan (SMAL)
Many people don't buy a home because they can't afford a down payment or they can't afford to pay the closing costs. The SMAL program is trying to change that, and it offers help to prospective homebuyers. This program will give applicants up to $8,000 to pay a down payment, closing costs, appraisal, or application fees. If you get funding from this program, you won't pay anything on it for 361 months or 30 years.

To get this funding, an applicant must have a home loan through the Delaware State Housing Authority and meet income and property purchase limits. These limits do vary depending on which county the homeowner wants to purchase the home in and how large the home is. The household income ranges from $83,200 to $116,480. The home purchase limits vary from $248,098 to $671,938.

Some counties and cities across the state may also offer local programs worth looking into.

Natural Disasters

Homeowner's insurance policies typically cover financial damages from most natural disasters other than flooding & earthquakes. The state has a very low risk of earthquakes, wildfires, tornadoes, & hail.

Flooding is covered below.

Flood Insurance

Homeowner's insurance policies typically do not cover flooding.

Kent & New Castle counties have a low flooding risk, while Sussex county has a very high flooding risk.

New Castle county has a very low risk of hurricane storm surges, while the risk is moderae in Kent & Sussex counties.

Home buyers with mortgages in high-risk areas are required to buy flood insurance. Most flood insurance policies are sold by the United States federal government through The National Flood Insurance Program. Under-priced flood insurance in high-risk areas act as a subsidy to wealthy homeowners.

“The NFIP does not charge nearly enough to cover the expected costs of its liabilities. The assessments are not sufficient to build any buffer to cover an extraordinary year, such as what occurred with Hurricane Katrina in 2005 or Hurricane Sandy in 2012. Because homeowners don't incur the full cost of building in a flood zone we end up with more houses there than if homeowners incurred the full cost of the flood risk, which exacerbates the government's costs in the next disaster.”


Typically, homes built after 2002, when building code regulations tightened, are subject to lower insurance rates than older homes. On the other hand, homes without hurricane straps, with roofs that do not meet current standards for wind, with older plumbing or with outdated electrical systems may be difficult €“ or very expensive €“ to insure.

Homeowners who live in lower risk areas & are not required to purchase flood insurance heavily cross-subsidize homeowners who are in areas where floods are more common.

Delaware Real Estate Laws

Property Taxes

The state of Delaware has a property tax rate that ranks as the fifth-lowest in the nation in 2016, with a median assessment of 0.56%. On average, the state collects $1,078 per year on a property that is valued at $249,400. This figure works out to around 1.6% of the property owner's annual income. The property tax rate changes from county to county, and currently New Castle County collects the most property taxes at $1,385 per property. Sussex county collects the lowest property tax rates at $662 per year. Single family homes have a slightly higher value of $271,585, which pushed the median property tax on single family homes to $1,526.

Delaware Homestead Laws

Delaware's homestead laws were originally formed to protect family farms in the event the family experienced financial hardship. Today, it has evolved into homes, condos, businesses, and other residences. However, the property in question must be the primary residence for the person who claims the homestead exemption.

Delaware's Homestead Laws automatically protect up to $125,000 of the property's equity. This exemption also includes disabled persons who are unable to work and married couples where one party is over 65 years old. So, if the property in question is under $125,000, it should be safe from creditors, however, if the property is over $125,000, the homeowner may not be able to save the property.

Delaware Emergency Mortgage Assistance Program (DEMAP)

The Delaware Emergency Mortgage Assistance Program is statewide, and it was designed to help prevent foreclosure for homeowners who lost 15% or more of their income due to an involuntary loss or reduction of hours, or an inability to work due to an illness or injury of an immediate family member or themselves.

The maximum loan amount is up to $30,000 or 24 months, and there will be no interest charged on this loan. Borrowers will be required to contribute a percentage of their monthly mortgage payment, and this will be based on their household income. The property must also be located in Delaware, meet the income limits, and not be a rental or commercial property.


In Delaware, mortgage lenders are required to go through the judicial process for foreclosures. This means that the mortgage lender must file a lawsuit through the court system to get the foreclosure process started. This process can be more lengthy than a nonjudicial foreclosure, but Delaware doesn't give lenders the option to choose which one they want to use. A judicial foreclosure process is normally quite time consuming which allows the homeowner plenty of time to bring their loan current.  However, while the home is going through the judicial process a lis pendens is placed on the home which makes it very difficult to sell.  A lis pendens is a notice that is placed on the home which tells a potential purchaser that the property is subject to pending litigation. 

Mortgage lenders are also allowed to go after a defaulted borrower for any deficiencies they may get from selling a property because Delaware is a recourse state. The deficiency judgment is usually limited, and this can be good news for any borrower who defaults on their mortgage. The deficiency that the mortgage lender can sue the borrower for is usually the difference between the mortgage loan amount and the amount the property sells for during the foreclosure sale or auction.

The only way a borrower may get out of being sued for a deficiency is by going through the Deed in Lieu of Foreclosure process. In this process, the property owner gives up all rights to the property in question and signs it over to the mortgage lender. If this happens, the mortgage lender typically releases the buyer from any obligations. However, it is very important to negotiate that the Deed in Lieu of Foreclosure specifies that the buyer is released from any and all mortgage negotiations, and this includes deficiency payments.

In Delaware, a homeowner does not have a right of redemption.  The right of redemption gives a homeowner the right to purchase the foreclosed property back from the person who purchased the home through the foreclosure process.  While they do not have the right of redemption, the original homeowner does have the right to contest the sale of the property in court. Because of the requirement to repay deficiency and the lack of right of redemption, the foreclosure process is quite disadvantageous to homeowners in Delaware when compared to other states. 

Additional Resources

Check out the following resources to learn more about the Delaware real estate market.

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