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Home Mortgage Rates in South Dakota

Mount Rushmore.

You can find the state of South Dakota in the Midwestern section of the United States. The state is the seventeenth-largest state by total area, and it is the fifth least populous state in the nation. South Dakota became a state in 1889, and it took its name from the Lakota and Dakota Sioux Native American tribes that inhabited the area. The state is known to be a tourist destination as the home to Mount Rushmore, several national parks, points of interest, and historical locations to visit. It is also an important agricultural state, which produces much of the nation's corn, soybeans, and wheat.

South Dakota is home to several large cities and rapidly growing metropolitan areas, but there are also rural communities, small towns, and large agricultural and ranching businesses in the state. The living pace in this state is generally considered to be more laid back with a very friendly attitude. The culture is very mixed, and it has Western, Native American, European, and rural influences. If you choose to live in one of the bigger cities, you'll get a thriving economy with a broad range of jobs and a faster-paced lifestyle. The smaller towns and tight-knit communities reflect the slower way of life this state is known for.

People move to South Dakota for its rich history, dozens of points of cultural interest, the outdoor recreational activities, and the thriving job markets. The cost of living in this state is well below the national average, as is the cost of housing. This makes the state very desirable for people who want to be able to live comfortably while affording a decent home. The educational opportunities are another big draw for the younger generation as well. There are over twenty-four different colleges and universities to choose from, and they have dozens of programs to take.

However, people are also moving out of South Dakota for several reasons. While the job market as a whole is doing very well, people with niche degrees may find it difficult to find steady employment. Additionally, there may not be as high paying jobs available as many people are looking for, and this can send them to other states in search of employment. The large rural areas is another reason people are moving away as you may have difficulty finding housing in the bigger cities, and most people don't want to commute hours to get to their jobs.

Younger people who are just starting out in their careers find South Dakota attractive as its larger cities are doing very well and they have a broad range of jobs available. Outdoor enthusiasts also find the state attractive as they can come and visit one of the parks in the state, or take in the world-class fishing and hunting opportunities. Retirees come to South Dakota because it is much easier to afford a comfortable living with a more restricted income thanks to the lower cost of living and the lower cost of housing.

Current Real Estate Trends

The South Dakota real estate market did relatively well during the housing market collapse, and the market first began to show signs of trouble during the fourth quarter of 2005 when it hit a slight peak and plateaued. This plateau ended with the market going into another slight peak in the third quarter of 2006. This peak signaled the start of a slower climb for South Dakota's real estate market until the first quarter of 2008 when the market went into a gradual peak that slowly dropped off. Once this peak dropped off, it rose sharply into the highest peak before the housing market started to fall, and this peak came during the first quarter of 2009. After this peak, the market went into a very gradual fall until the second quarter of 2010 when it started on a final gradual peak that ended in the market's lowest point during the second quarter of 2011.

When the market hit its lowest peak, it began to climb at a gradual pace until the third quarter of 2012. At this point, the real estate market started climbing at a slightly more rapid pace that went into a gradual peak that leveled out during the first quarter of 2014. The first quarter of 2014 marked the start of a rapid climb for the real estate market, and this climb continued largely uninterrupted until the first quarter of 2016. This period brought a very short plateau that ended in a slight peak during the third quarter of 2016. Since that point, the market has been on a rapid climb. It is also important to note that South Dakota's real estate market has had prices that are higher then they were before the housing market collapsed since the fourth quarter of 2012.

In comparison, Sioux Falls didn't fare as well during the housing market crash, and this housing market started to show signs of trouble during the third quarter of 2005 when the market went from a steady increase to several gradual peaks and drops. From the third quarter of 2005 until the first quarter of 2006, the housing market hit a plateau. When this plateau ended, Sioux Falls had a housing market that went into the first of several gradual peaks and drops. The first peak ended during the fourth quarter of 2006, and the market immediately went into another gradual peak that ended during the third quarter of 2007. This peak brought a slightly larger drop that went into the highest point in the housing market during the first quarter of 2009. This peak gave way to a steep drop that hit a small plateau between the third and fourth quarter of 2009, and the market continued to drop until it fell to its lowest point during the second quarter of 2010.

This low point in the housing market didn't last long, and it started to rise into a gradual peak that plateaued again between the third and fourth quarter of 2010. This dropped away once again, and the market recovered only to go into another slight peak in the fourth quarter of 2011. This peak gradually fell away until the third quarter of 2012 when the market began on a steady climb. There was a slight peak during the first quarter of 2013 and a slight drop during the first quarter of 2014. However, the market has been on a relatively stable climb ever since, and it's housing market prices have been higher than they were before the market collapsed since the first quarter of 2013.

Historic Real Estate Trends

The early 1990s brought about a period of growth for the South Dakota real estate market that saw several unsteady peaks and drops. The fourth quarter of 1990 saw the housing market at a low point that quickly rose into a peak during the second quarter of 1991. This peak fell away, and the market quickly rose into another small peak during the first quarter of 1992. This peak leveled out until the fourth quarter of 1994 when the housing market experienced a sharp drop that recovered by the second quarter of 1995. The first and third quarters of 1996 brought two more small peaks, and then the housing market began a steadier climb until the 2000s.

The fourth quarter of 2000 brought a very short plateau that ended with the market started to rise once again. It had a few very gradual peaks that ended during the fourth quarter of 2001 and the third quarter of 2003. From the third to the fourth quarter of 2003, the market saw a steep increase that leveled off once again into a steady climb until the fourth quarter of 1995.

Sioux Falls started the 1990s on a plateau that went into a gradual peak by the second quarter of 1991. This quickly dropped off, and the market found itself going into another peak and short plateau during the first and second quarters of 1992. Once these passed, the real estate market started on a gradual rise with a few small peaks until the market hit a sharp peak during the fourth quarter of 1994 and it then went into a sharp fall that rebounded by the second quarter of 1995. The market continued to climb until the first quarter of 1996 when it hit a peak and slowed down significantly. This slower pace continued until the fourth quarter of 1998 when the market picked up speed. By the time the 2000s came, the market was once again on a steady rise.

The 2000s brought a period of more rapid growth in the Sioux Falls real estate market, and this really picked up speed after the fourth quarter of 2001. The market continued on this trend until it hit a sharp peak during the fourth quarter of 2003, and this went into a short but rapid fall. The fall ended by the first quarter of 2004, and the market returned to its more gradual rise until the third quarter of 2005 when it began to show signs of trouble.

The Impact of Tourism

South Dakota is a state that is highly reliant on tourism for jobs and income. In the aftermath of the Great Recession the impacts on South Dakota were mixed. On the one hand, people cut back on travel as a way to trim their budgets and save money. On the other hand, those who still traveled had more affordable vacations. A trip to Mount Rushmore with one’s family is more educational and less expensive that a trip to Hawaii. While the overall number of visitors to the area has fallen some, it is less dramatic that the falloff seen at other vacation destinations. Overall, this has impacted the real estate market less than in other states as well (Florida real estate had been amongst the hardest hit by the recession).

The dynamics of real estate prices in South Dakota are unique because of the presence of Mount Rushmore in the state, as well as the large amount of land there that falls within the protection of national parks. For this reason, large sections of the state are essentially unpopulated. Not surprisingly, the most valuable real estate in South Dakota borders these parks and attractions, primarily in the south west quadrant of the state. Property near the Minnesota border also tends to boast higher home values.

Homeownership Across the State

Homeownership across the state of South Dakota has historically been well above the national average. In 1984 ownership stood at 69.6% before falling to 65.9% in 1986. Ownership ultimately bottomed in 1993 at 65.6% before jumping to a high of 71.5% in 2001. Ownership began to slide in 2003 and fell to a low of 68.4% in 2005. In 2006 ownership jumped back to 70.6%. In 2013 ownership dipped to a post recession low of 67.8%, though quickly rebounded with ownership standing at 69.4% in 2016. In 2016 the national average ownership rate was 63.4%.

Places to Live

Metropolitan Areas

SD Rank US Rank Metropolitan Area 2016 Pop 2010 Pop Change % △
1 186 Sioux Falls 255,729 228,261 27,468 12.03%
2 250 Sioux City, IA-NE-SD Metro Area 169,140 168,563 577 0.34%
3 290 Rapid City 145,661 134,598 11,063 8.22%
4 662 Aberdeen 43,080 40,602 2,478 6.10%
5 773 Brookings 34,135 31,965 2,170 6.79%
6 834 Watertown 28,063 27,227 836 3.07%
7 865 Spearfish 25,281 24,097 1,184 4.91%
8 874 Mitchell 23,277 22,835 442 1.94%
9 885 Yankton 22,616 22,438 178 0.79%
10 890 Pierre 22,014 21,361 653 3.06%
11 914 Huron 18,101 17,398 703 4.04%
12 929 Vermillion 14,086 13,864 222 1.60%

Popular Cities in South Dakota

Sioux Falls

Downtown Sioux Falls.

South Dakota's largest city is Sioux Falls with a population of 174,360 people as of 2016. The city earned the nickname of the “Best Little City in America,” and it has the motto of “The Heart of America.” Sioux Falls was founded in 1856, and it is located at the junction of Interstate 29 and Interstate 90. The Sioux Falls Metro has a population of 255,7129 people, and it was ranked as one of the fastest growing metros in the nation.

The local economy historically relied heavily on the agriculture and mining industries, but it has experienced an expansion over the past few decades. The retail, healthcare, education, and financial services make up large support systems in the current economy. However, the city does still have several manufacturing plants and large factories, and it was named as one of the best cities in the nation for business.

Sioux Falls has a humid continental climate that has hot, humid summers and dry, cool winters. This landlocked state doesn't have any large bodies of water to temper the climate year round, and this can lead to very hot summers. July is the hottest summer month with temperatures in the seventies and high humidity. January is the coolest month with temperatures in the thirties and moderate amounts of snowfall. The spring and fall are typically shorter seasons in the state.

The city has recently experienced a renewed interest in the arts and cultural events, and it is home to several museums, parks, festivals, and performing arts groups which attract visitors from across the state. The Festival of Bands hosts over forty marching bands at this annual event, or you can visit the SiouxperCon anime and comic book celebration. The Sioux Falls Jazz and Blues Festival is a free three day concert that draws hundreds of people each year, or you can take in a performance at the Orpheum Theater.

The Sioux Falls School District serves this city, and it has over 23,000 enrolled students. It has twenty-five elementary schools, five middle schools, two high schools, and an alternative school. Students can attend the University of Sioux Falls South Dakota, or they can attend Augustana University. The Southeast Technical College is also found in Sioux Falls.

Healthcare dominates the local economy, and two of the three largest employers in Sioux Falls come from this sector. The largest employer in the city is Sanford Health with over 9,500 employees. The second biggest employer is also from the healthcare field, and Avera Health has almost 8,000 staff. Finally, Smithfield Foods rounds out the top three biggest employers in Sioux Falls with 3,750 staff.

Sioux Falls has an unemployment rate that is almost 3% below the national average, and it has had job growth over the past year of over 2%. The economy of this city is projected to get even stronger over the next ten years as it is looking to add another 41% of jobs to the economy.

The city has a local median home price of $172,400, and this averages out to a price per square foot of $154. These prices have risen over the past year by 9.4%, and they're estimated to rise by another 2.9% in the coming year. The Sioux Falls Metro ahs a local median home price of $225,500.

Rapid City

Rapid City Skyline.

Rapid City is the second biggest city in the state, and it has a population of 74,048 people. The city takes its name from Rapid Creek as it was established along its banks in 1876. The city has the nickname of the “Gateway to the Black Hills,” and the city is split by a mountain range. The Rapid City Metro has a 2016 population of 145,661 people. This city is home to several large tourist attractions as well.

This city has a very diverse economy, and it relies heavily on the tourism, education, military, healthcare, and the financial and investment industries. As there are several well-known tourist attractions in and around the city, this draws thousands of tourists through year-round. The government also forms a large portion of the economy, and this is both state and Federal.

Rapid City has a steppe climate that is characterized by cold, dry winters with moderate to heavy snowfall and mild, warm summers. December is usually the coldest month with temperatures in the thirties, and July is the warmest month with temperatures in the high eighties. The heavier snowfall doesn't usually come until March or April, and due to the city's location to the Black Hills, the temperatures can fluctuate significantly in the span of a day.

You'll find several museums, cultural points of interest, tourist attractions, and performing arts groups in the city. The Journey Museum is very popular, as well as the Black Hills Symphony Orchestra. Tourists also come through the city by the thousands each year to visit Mount Rushmore, the Crazy Horse Memorial, and the Wind Cave National Park.

The city is served by the Rapid City Area School District, and it has around 13,000 students enrolled. For secondary education, students can attend the South Dakota School of Mines and Technology or they can attend the Black Hills State University. The city is also home to several tech and charter school systems.

The Ellsworth Air Force Base is the city's largest employer, and it has around 4,000 year-round staff. The second largest employer in Rapid City is the City of Rapid City with around 2,500 staff members. The third biggest employer is the Rapid City Area School District with around 1,200 staff members.

Rapid City has a very strong economy with an unemployment rate that is over 2.2% below the national average. In addition to this, the city's economy has grown by just under 1% in the last year. Over the next decade, Rapid City is estimating that it'll add 38% more jobs to the economy, and this should help to strengthen it further.

The city has a local median home price of $178,300, and this averages out to a price per square foot of $175. Over the last year, these prices have increased by 3.2%, and they're projected to rise by additional 1.2% in the coming year. The local median home price for the Rapid City Metro is $219,900.

Aberdeen

The third biggest city in the state of South Dakota is the city of Aberdeen with a population of 28,415 people. Aberdeen was settled in 1881 when several trading posts were built around the area, and it was incorporated in 1883. The railroad brought a rapid increase in the city's population, and Aberdeen flourished. The Aberdeen Metro has a population of 43,080 residents.

The economy in this city is very diverse, but it is dominated by the healthcare, finance, and education fields. Additionally, the service and retail industries play large parts in supporting the local economy as well. There are several large businesses in the city's downtown, but it is also a place that entrepreneurs and small businesses and cafes can do very well in.

Aberdeen has a humid continental climate with warm and humid summers to cold and snowy winters. The city also experiences four distinct seasons thanks to its location to moderately-sized bodies of water. August is usually the hottest month of the year with temperatures in the eighties, and January is the coldest month with temperatures in the thirties.

You'll find several cultural organizations in and around Aberdeen, as well as museums, theaters, and parks which attract tourists from across the state. The Aberdeen Community Theatre has been putting on various year-round performances since 1979. You can visit the ArtWorks Cooperative which is a gallery that showcases local talent, or you can visit the annual South Dakota Film Festival that is held in the summer months.

The Aberdeen School District is a large public school district in the city that has over 14,000 students ranging from elementary to high school. There are two higher education institutions located in Aberdeen, and students can attend either Northern State University or Presentation College. The city is also home to the South Dakota School for the Blind and Visually Impaired.

Finance, education, and healthcare make up the top three biggest employers in Aberdeen. The biggest employer is Avera Saint Luke's Hospital, and it has 1,500 employees. The second biggest employer is the Aberdeen School District with 650 employees. The third biggest employer is Wells Fargo Auto Finance with 500 staff.

Aberdeen's unemployment rate is well below the national average, and the economy has also had recent job growth over the past year to strengthen it further. Over the next ten years, the city is hoping to add 38% more jobs to the economy, and this should help to make it even stronger.

The local median home price for Aberdeen is %160,000, and this averages out to a price per square foot of $175. Over the last year, these prices have gone up by 2.4%, and they're projected to go up by another 3.5% in the coming year. The Aberdeen Metro has a local median home price of $166,000.

Brookings

The fourth biggest city in South Dakota is the city of Brookings with a population of 23,895. The city got its name in honor of one of the pioneer promotors who established this area by the name of Wilmot Brookings. The railroad played a big role in Brookings being established as a city, and a railroad station was built in this city in 1879. The Brookings Metro has a population of 34,135 people.

The local economy has since shifted away from the transportation industry, and it currently has education, information technology, manufacturing, finance, healthcare, and retail to rely on. The large college that is found here plays a vital role in the strength of the local economy.

Brookings is also classified as having a humid continental climate with long summers with hot and humid temperatures and cold winters with moderate snowfall rates. The hottest temperatures come in July, and they typically stay in the high eighties. January has the coldest temperatures each year, and temperatures usually stay in the twenties.

The city has several cultural attractions and museums that draw thousands of tourist each year. The Children's Museum of South Dakota is a very popular family-friendly attraction. People can also pay a visit to the McCrory Gardens and South Dakota Arboretum, or take day trip and walk through the South Dakota Art Museum.

The city is served by the Brookings School District, and this school system has over 8,000 students enrolled each year. For secondary education, students can attend South Dakota State University, and this University is the largest in the state with over 12,000 students enrolled. It is also the oldest institution of higher education in the state.

The largest employer in the city of Brookings is South Dakota State University with over 3,400 full and part-time staff members. The second biggest employer is Daktronics with over 1,700 staff members. Finally, the employer that claims the spot for the third biggest in the city is 3M with 800 staff.

Brookings is another city that has an unemployment rate that is over 2% below the national average. Also, the local economy has grown by over 2% in the past year, and this works to strengthen it further. Over the next ten years, Brookings is slated to add up to 41% more jobs.

The local median home price for Brookings is $178,800, and this works out to around $145 per square foot. These prices have increased by 5% in the last year, and they're projected to increase by another 3.2% in the coming year. The Brookings Metro has a local median home price of $217,950.

South Dakota Census Data

According to the United States Census an estimated 865,454 people live in the state of South Dakota. The state has 75,811 mi² of land area, which gave it a population density of 11.42 per mi². Here is a list of cities, towns, villages & Census Designated Places with more than 100 residents, 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 Sioux Falls Minnehaha & Lincoln 174,360 153,888 20,472 13.30% 72.96 2,389.80
2 Rapid City Pennington 74,048 67,956 6,092 8.96% 55.41 1,336.37
3 Aberdeen Brown 28,415 26,091 2,324 8.91% 15.5 1,833.23
4 Brookings Brookings 23,895 22,056 1,839 8.34% 12.94 1,846.60
5 Watertown Codington 22,172 21,482 690 3.21% 17.45 1,270.60
6 Mitchell Davison 15,729 15,254 475 3.11% 11.14 1,411.94
7 Yankton Yankton 14,566 14,454 112 0.77% 8.21 1,774.18
8 Pierre Hughes 14,008 13,646 362 2.65% 13.06 1,072.59
9 Huron Beadle 13,117 12,592 525 4.17% 9.48 1,383.65
10 Spearfish Lawrence 11,531 10,494 1,037 9.88% 16.34 705.69
11 Vermillion Clay 10,844 10,571 273 2.58% 4.03 2,690.82
12 Brandon Minnehaha 9,923 8,785 1,138 12.95% 5.37 1,847.86
13 Box Elder Pennington & Meade 9,348 7,800 1,548 19.85% 13.9 672.52
Rapid Valley CDP Pennington 8,516 8,260 256 3.10% 7.44 1,144.62
14 Madison Lake 7,425 6,474 951 14.69% 4.61 1,610.63
15 Sturgis Meade 6,832 6,627 205 3.09% 3.99 1,712.28
16 Harrisburg Lincoln 5,734 4,089 1,645 40.23% 2.48 2,312.10
17 Belle Fourche Butte 5,655 5,594 61 1.09% 8.53 662.95
18 Tea Lincoln 5,032 3,806 1,226 32.21% 1.69 2,977.51
19 Dell Rapids Minnehaha 3,705 3,633 72 1.98% 2.03 1,825.12
20 Mobridge Walworth 3,570 3,465 105 3.03% 1.89 1,888.89
21 Hot Springs Fall River 3,564 3,711 -147 -3.96% 3.61 987.26
Pine Ridge CDP Shannon 3,562 3,308 254 7.68% 2.84 1,254.23
22 Canton Lincoln 3,386 3,057 329 10.76% 3.19 1,061.44
23 Milbank Grant 3,203 3,353 -150 -4.47% 2.76 1,160.51
24 Hartford Minnehaha 3,140 2,534 606 23.91% 2.27 1,383.26
25 Lead Lawrence 3,010 3,124 -114 -3.65% 2.06 1,461.17
Dakota Dunes CDP Union 2,970 2,540 430 16.93% 2.44 1,217.21
Blackhawk CDP Meade 2,893 2,892 1 0.03% 4.88 592.83
26 Winner Tripp 2,861 2,897 -36 -1.24% 2.2 1,300.45
27 North Sioux City Union 2,731 2,530 201 7.94% 2.26 1,208.41
28 Sisseton Roberts 2,429 2,470 -41 -1.66% 1.59 1,527.67
29 Summerset Meade 2,392 1,814 578 31.86% 2.21 1,082.35
30 Chamberlain Brule 2,369 2,387 -18 -0.75% 6.64 356.78
31 Redfield Spink 2,339 2,333 6 0.26% 1.89 1,237.57
32 Flandreau Moody 2,332 2,341 -9 -0.38% 1.86 1,253.76
33 Lennox Lincoln 2,330 2,111 219 10.37% 1.31 1,778.63
34 Fort Pierre Stanley 2,148 2,078 70 3.37% 3.11 690.68
North Eagle Butte CDP Dewey 2,091 1,954 137 7.01% 9.1 229.78
North Spearfish CDP Lawrence 2,054 2,221 -167 -7.52% 3.17 647.95
35 Beresford Union & Lincoln 1,969 2,005 -36 -1.80% 1.78 1,106.18
36 Custer Custer 1,956 2,067 -111 -5.37% 2.53 773.12
37 Springfield Bon Homme 1,950 1,989 -39 -1.96% 1.01 1,930.69
38 Volga Brookings 1,910 1,768 142 8.03% 0.91 2,098.90
Colonial Pine Hills CDP Pennington 1,906 2,493 -587 -23.55% 15.89 119.95
39 Elk Point Union 1,851 1,963 -112 -5.71% 1.36 1,361.03
40 Webster Day 1,808 1,886 -78 -4.14% 1.49 1,213.42
Rosebud CDP Todd 1,665 1,587 78 4.91% 12.96 128.47
41 Wagner Charles Mix 1,586 1,566 20 1.28% 2.04 777.45
42 Parkston Hutchinson 1,511 1,508 3 0.20% 0.91 1,660.44
43 Groton Brown 1,509 1,458 51 3.50% 1.75 862.29
44 Miller Hand 1,420 1,489 -69 -4.63% 0.98 1,448.98
Oglala CDP Shannon 1,404 1,290 114 8.84% 12.5 112.32
Porcupine CDP Shannon 1,369 1,062 307 28.91% 9.54 143.50
45 Eagle Butte Ziebach & Dewey 1,349 1,318 31 2.35% 1.17 1,152.99
46 Crooks Minnehaha 1,327 1,269 58 4.57% 0.77 1,723.38
47 Salem McCook 1,324 1,347 -23 -1.71% 1.24 1,067.74
48 Freeman Hutchinson 1,308 1,306 2 0.15% 1.11 1,178.38
Fort Thompson CDP Buffalo 1,286 1,282 4 0.31% 10.38 123.89
49 Platte Charles Mix 1,273 1,230 43 3.50% 1.02 1,248.04
50 Deadwood Lawrence 1,264 1,270 -6 -0.47% 3.83 330.03
51 Britton Marshall 1,250 1,241 9 0.73% 0.73 1,712.33
52 Gregory Gregory 1,244 1,295 -51 -3.94% 1.71 727.49
53 Mission Todd 1,236 1,182 54 4.57% 0.59 2,094.92
54 Clear Lake Deuel 1,226 1,273 -47 -3.69% 3.07 399.35
55 Lemmon Perkins 1,216 1,227 -11 -0.90% 1.04 1,169.23
56 Garretson Minnehaha 1,193 1,166 27 2.32% 1.45 822.76
57 Gettysburg Potter 1,155 1,162 -7 -0.60% 1.89 611.11
58 Baltic Minnehaha 1,152 1,089 63 5.79% 0.74 1,556.76
Antelope CDP Todd 1,126 826 300 36.32% 2.29 491.70
59 De Smet Kingsbury 1,077 1,089 -12 -1.10% 1.16 928.45
60 Martin Bennett 1,071 1,071 0 0.00% 0.53 2,020.75
61 Tyndall Bon Homme 1,049 1,067 -18 -1.69% 1.58 663.92
62 Clark Clark 1,048 1,139 -91 -7.99% 1.28 818.75
63 Hill City Pennington 1,008 948 60 6.33% 1.26 800.00
64 Parker Turner 1,007 1,022 -15 -1.47% 1.15 875.65
Kyle CDP Shannon 983 846 137 16.19% 1.47 668.71
65 Worthing Lincoln 957 877 80 9.12% 0.56 1,708.93
66 Ipswich Edmunds 951 954 -3 -0.31% 1.34 709.70
67 Whitewood Lawrence 931 927 4 0.43% 0.64 1,454.69
68 Wessington Springs Jerauld 921 956 -35 -3.66% 1.77 520.34
Ashland Heights CDP Pennington 891 754 137 18.17% 2.92 305.14
69 Arlington Kingsbury & Brookings 880 915 -35 -3.83% 1.66 530.12
70 Centerville Turner 879 882 -3 -0.34% 0.72 1,220.83
71 Wall Pennington 872 766 106 13.84% 2.17 401.84
72 Piedmont Meade 860 222 638 287.39% 0.29 2,965.52
Lake Madison CDP Lake 859 683 176 25.77% 4.75 180.84
73 Eureka McPherson 848 868 -20 -2.30% 0.93 911.83
74 Lake Andes Charles Mix 841 879 -38 -4.32% 0.8 1,051.25
75 Scotland Bon Homme 819 841 -22 -2.62% 0.85 963.53
Wanblee CDP Jackson 801 725 76 10.48% 2.14 374.30
76 Howard Miner 800 858 -58 -6.76% 0.95 842.11
77 Marion Turner 779 784 -5 -0.64% 0.87 895.40
78 Viborg Turner 774 782 -8 -1.02% 0.4 1,935.00
79 Philip Haakon 765 779 -14 -1.80% 0.6 1,275.00
80 Valley Springs Minnehaha 760 759 1 0.13% 0.82 926.83
81 Highmore Hyde 754 795 -41 -5.16% 1.88 401.06
82 Estelline Hamlin 751 768 -17 -2.21% 0.95 790.53
83 Alcester Union 748 807 -59 -7.31% 0.33 2,266.67
84 Faulkton Faulk 747 736 11 1.49% 1.01 739.60
Johnson Siding CDP Pennington 736 659 77 11.68% 3.73 197.32
85 Edgemont Fall River 736 774 -38 -4.91% 0.97 758.76
Parmelee CDP Todd 729 562 167 29.72% 5.71 127.67
86 Elkton Brookings 723 736 -13 -1.77% 1.55 466.45
87 Plankinton Aurora 718 707 11 1.56% 0.76 944.74
88 Kadoka Jackson 707 654 53 8.10% 2.28 310.09
89 Colton Minnehaha 684 687 -3 -0.44% 0.7 977.14
Manderson-White Horse Creek CDP Shannon 681 626 55 8.79% 5.73 118.85
90 Kimball Brule 679 703 -24 -3.41% 3.09 219.74
91 Armour Douglas 678 699 -21 -3.00% 0.94 721.28
92 Woonsocket Sanborn 671 655 16 2.44% 0.78 860.26
93 New Underwood Pennington 668 660 8 1.21% 1.01 661.39
94 Aurora  Brookings 667 532 135 25.38% 0.46 1,450.00
95 McLaughlin Corson 665 663 2 0.30% 0.4 1,662.50
96 Onida Sully 659 658 1 0.15% 0.64 1,029.69
Allen CDP Bennett 658 420 238 56.67% 3.24 203.09
97 Selby Walworth 649 642 7 1.09% 0.71 914.08
98 Tripp Hutchinson 638 647 -9 -1.39% 0.59 1,081.36
99 Canistota McCook 636 656 -20 -3.05% 0.56 1,135.71
100 Castlewood Hamlin 633 627 6 0.96% 1.15 550.43
101 Alexandria Hanson 626 615 11 1.79% 0.62 1,009.68
Goodwill CDP Roberts 623 513 110 21.44% 0.76 819.74
102 Menno Hutchinson 620 608 12 1.97% 0.52 1,192.31
Shindler CDP Lincoln 601 584 17 2.91% 1.5 400.67
Green Valley CDP Pennington 599 928 -329 -35.45% 3.84 155.99
103 Avon Bon Homme 591 590 1 0.17% 0.64 923.44
Wounded Knee CDP Shannon 590 382 208 54.45% 1.07 551.40
Lower Brule CDP Lyman 587 613 -26 -4.24% 0.36 1,630.56
104 White River Mellette 587 581 6 1.03% 0.52 1,128.85
105 Burke Gregory 586 604 -18 -2.98% 0.56 1,046.43
106 Newell Butte 586 603 -17 -2.82% 1.01 580.20
107 Corsica Douglas 584 592 -8 -1.35% 0.84 695.24
108 Humboldt Minnehaha 580 589 -9 -1.53% 0.62 935.48
109 Colman Moody 579 594 -15 -2.53% 1.88 307.98
110 St. Francis Todd 576 709 -133 -18.76% 0.36 1,600.00
111 Waubay Day 575 576 -1 -0.17% 1.45 396.55
112 Lake Preston Kingsbury 565 599 -34 -5.68% 0.76 743.42
Blucksberg Mountain CDP Meade 541 462 79 17.10% 0.67 807.46
113 Veblen Marshall 539 531 8 1.51% 0.31 1,738.71
114 Dupree Ziebach 527 525 2 0.38% 0.39 1,351.28
115 Jefferson Union 507 547 -40 -7.31% 0.5 1,014.00
116 Presho Lyman 507 497 10 2.01% 0.67 756.72
117 Wilmot Roberts 499 492 7 1.42% 0.49 1,018.37
118 Bowdle Edmunds 492 502 -10 -1.99% 0.64 768.75
119 Timber Lake Dewey 489 443 46 10.38% 0.41 1,192.68
120 Warner Brown 488 457 31 6.78% 0.28 1,742.86
121 White Brookings 487 485 2 0.41% 0.99 491.92
122 Lake Norden Hamlin 481 467 14 3.00% 0.83 579.52
Marty CDP Charles Mix 479 402 77 19.15% 3.22 148.76
123 Oacoma Lyman 476 451 25 5.54% 2.59 183.78
124 Bridgewater McCook 475 492 -17 -3.46% 1.13 420.35
125 Montrose McCook 463 472 -9 -1.91% 0.41 1,129.27
126 Murdo Jones 461 488 -27 -5.53% 0.63 731.75
127 Big Stone City Grant 456 467 -11 -2.36% 1.2 380.00
128 Bryant Hamlin 450 456 -6 -1.32% 0.52 865.38
129 Emery Hanson 449 447 2 0.45% 0.45 997.78
Lake Poinsett CDP Hamlin & Brookings 441 493 -52 -10.55% 5.21 84.64
130 Mount Vernon Davison 441 462 -21 -4.55% 0.35 1,260.00
131 Leola McPherson 441 457 -16 -3.50% 0.71 621.13
132 Rosholt Roberts 423 423 0 0.00% 0.29 1,458.62
133 Irene Turner, Clay & Yankton 421 420 1 0.24% 0.26 1,619.23
134 Faith Meade 419 421 -2 -0.48% 1.2 349.17
135 Herreid Campbell 416 438 -22 -5.02% 1.39 299.28
136 Tabor Bon Homme 413 423 -10 -2.36% 0.37 1,116.22
137 Gayville Yankton 409 407 2 0.49% 0.21 1,947.62
138 Hurley Turner 405 415 -10 -2.41% 0.62 653.23
139 Hoven Potter 399 406 -7 -1.72% 0.31 1,287.10
140 Wolsey Beadle 394 376 18 4.79% 2.26 174.34
141 Hermosa Custer 392 398 -6 -1.51% 0.48 816.67
Meadow View Addition CDP Minnehaha 382 538 -156 -29.00% 1.08 353.70
142 Hayti Hamlin 378 381 -3 -0.79% 0.31 1,219.35
Okreek CDP Todd 373 269 104 38.66% 44.99 8.29
143 White Lake Aurora 372 372 0 0.00% 0.43 865.12
144 Florence Codington 369 374 -5 -1.34% 0.69 534.78
145 Blunt Hughes 358 354 4 1.13% 0.49 730.61
146 Buffalo Harding 353 330 23 6.97% 0.55 641.82
147 Keystone Pennington 340 337 3 0.89% 2.86 118.88
148 Bison Perkins 336 333 3 0.90% 0.99 339.39
Chester CDP Lake 334 261 73 27.97% 0.82 407.32
Little Eagle CDP Corson 332 319 13 4.08% 1.4 237.14
149 Ethan Davison 329 331 -2 -0.60% 0.25 1,316.00
150 Bristol Day 328 341 -13 -3.81% 0.52 630.77
151 Langford Marshall 326 313 13 4.15% 0.31 1,051.61
Anderson CDP Minnehaha 325 371 -46 -12.40% 0.98 331.63
152 Hudson Lincoln 320 296 24 8.11% 0.28 1,142.86
153 Wakonda Clay 316 321 -5 -1.56% 0.39 810.26
154 Roscoe Edmunds 313 329 -16 -4.86% 0.47 665.96
Bullhead CDP Corson 298 348 -50 -14.37% 3.01 99.00
Two Strike CDP Todd 298 209 89 42.58% 18.53 16.08
Long Hollow CDP Roberts 298 192 106 55.21% 14.43 20.65
155 Pukwana Brule 296 285 11 3.86% 0.76 389.47
Pine Lakes Addition CDP Minnehaha 291 314 -23 -7.32% 0.19 1,531.58
156 Summit Roberts 288 288 0 0.00% 0.56 514.29
157 Colome Tripp 286 296 -10 -3.38% 0.27 1,059.26
158 Stickney Aurora 286 284 2 0.70% 0.27 1,059.26
159 Alpena Jerauld 278 286 -8 -2.80% 1.63 170.55
160 Egan Moody 276 278 -2 -0.72% 1.07 257.94
161 Bonesteel Gregory 272 275 -3 -1.09% 0.35 777.14
Renner Corner CDP Minnehaha 270 305 -35 -11.48% 1.29 209.30
162 Henry Codington 264 267 -3 -1.12% 1.45 182.07
163 Chancellor Turner 262 264 -2 -0.76% 0.22 1,190.91
164 Iroquois Kingsbury & Beadle 261 266 -5 -1.88% 0.62 420.97
165 Kennebec Lyman 261 240 21 8.75% 0.85 307.06
166 New Effington Roberts 256 256 0 0.00% 0.26 984.62
Bath CDP Brown 251 172 79 45.93% 0.29 865.52
167 Willow Lake Clark 245 263 -18 -6.84% 0.37 662.16
168 Nisland Butte 236 232 4 1.72% 0.27 874.07
169 Trent Moody 235 232 3 1.29% 1.04 225.96
170 Hecla Brown 229 227 2 0.88% 0.34 673.53
171 Delmont Douglas 228 234 -6 -2.56% 0.76 300.00
172 Pollock Campbell 226 241 -15 -6.22% 0.32 706.25
173 South Shore Codington 226 225 1 0.44% 1.4 161.43
174 Gary Deuel 225 227 -2 -0.88% 0.69 326.09
175 Pickstown Charles Mix 224 201 23 11.44% 0.65 344.62
176 Reliance Lyman 219 191 28 14.66% 1.09 200.92
177 Mellette Spink 218 210 8 3.81% 0.26 838.46
178 Geddes Charles Mix 214 208 6 2.88% 0.61 350.82
179 Tulare Spink 214 207 7 3.38% 0.26 823.08
Spring Creek CDP Todd 211 268 -57 -21.27% 10.37 20.35
180 Bruce  Brookings 206 204 2 0.98% 0.37 556.76
181 Toronto Deuel 205 212 -7 -3.30% 0.31 661.29
182 Ramona Lake 205 174 31 17.82% 0.27 759.26
183 Frederick Brown 204 199 5 2.51% 0.39 523.08
White Horse CDP Todd 202 276 -74 -26.81% 3.16 63.92
184 Hosmer Edmunds 200 208 -8 -3.85% 0.99 202.02
185 St. Lawrence Hand 198 198 0 0.00% 0.34 582.35
186 Wentworth Lake 197 171 26 15.20% 0.25 788.00
La Plant CDP Dewey 193 171 22 12.87% 9.45 20.42
Brant Lake CDP Lake 192 159 33 20.75% 1.19 161.34
187 Doland Spink 185 180 5 2.78% 0.59 313.56
188 Roslyn Day 178 183 -5 -2.73% 0.2 890.00
189 Kranzburg Codington 177 172 5 2.91% 0.76 232.89
190 Wessington Beadle & Hand 177 170 7 4.12% 0.38 465.79
191 Letcher Sanborn 176 173 3 1.73% 0.62 283.87
192 Mission Hill Yankton 173 177 -4 -2.26% 0.33 524.24
193 McIntosh Corson 172 173 -1 -0.58% 0.73 235.62
Agency Village CDP Roberts 170 181 -11 -6.08% 5.71 29.77
194 Peever Roberts 168 168 0 0.00% 0.12 1,400.00
Norris CDP Mellette 165 152 13 8.55% 0.87 189.66
195 Wentworth village Lake 164 171 -7 -4.09% 0.25 656.00
Whitehorse CDP Dewey 162 141 21 14.89% 2.74 59.12
196 Volin Yankton 162 161 1 0.62% 0.2 810.00
197 Monroe Turner 158 160 -2 -1.25% 0.38 415.79
198 Frankfort Spink 154 149 5 3.36% 0.79 194.94
199 Isabel Dewey 152 135 17 12.59% 0.91 167.03
200 Spencer McCook 151 154 -3 -1.95% 0.27 559.26
201 Northville Spink 146 143 3 2.10% 0.38 384.21
202 Conde Spink 145 140 5 3.57% 0.56 258.93
203 Goodwin Deuel 141 146 -5 -3.42% 0.47 300.00
204 Artesian Sanborn 140 138 2 1.45% 0.55 254.55
205 Carthage Miner 139 144 -5 -3.47% 1.46 95.21
206 Columbia Brown 137 136 1 0.74% 1.52 90.13
207 Buffalo Gap Custer 136 126 10 7.94% 0.31 438.71
208 Astoria Deuel 135 139 -4 -2.88% 0.16 843.75
209 Westport Brown 134 133 1 0.75% 0.23 582.61
210 Java Walworth 134 129 5 3.88% 0.49 273.47
211 Central City Lawrence 131 134 -3 -2.24% 0.15 873.33
212 Dimock Hutchinson 131 125 6 4.80% 0.16 818.75
Bath Corner CDP 129 49 80 163.27% 0.17 758.82
213 Pierpont Day 129 135 -6 -4.44% 0.15 860.00
Forestburg CDP Sanborn 128 73 55 75.34% 0.6 213.33
Vale CDP Butte 128 136 -8 -5.88% 1.47 87.07
214 Claremont Brown 128 127 1 0.79% 0.25 512.00
215 Lesterville Yankton 128 127 1 0.79% 0.2 640.00
216 Oldham Kingsbury 127 133 -6 -4.51% 0.25 508.00
217 Oelrichs Fall River 127 126 1 0.79% 0.38 334.21
218 Midland Haakon 126 129 -3 -2.33% 0.34 370.59
219 Ashton Spink 124 122 2 1.64% 0.44 281.82
220 Harrold Hughes 123 124 -1 -0.81% 0.27 455.56
221 Dallas Gregory 122 120 2 1.67% 0.5 244.00
222 Sinai Brookings 119 120 -1 -0.83% 0.37 321.62
223 Cavour Beadle 118 114 4 3.51% 0.41 287.80
Soldier Creek CDP Todd 115 227 -112 -49.34% 12.23 9.40
224 Batesland Shannon 115 108 7 6.48% 0.09 1,277.78
225 Revillo Grant 114 119 -5 -4.20% 0.17 670.59
Harrison CDP Douglas 113 52 61 117.31% 0.11 1,027.27
226 Fairfax Gregory 112 115 -3 -2.61% 0.3 373.33
Mansfield CDP Spink & Brown 111 93 18 19.35% 2.41 46.06
227 Yale Beadle 111 108 3 2.78% 0.15 740.00
228 Pringle Custer 109 112 -3 -2.68% 0.24 454.17
229 Corona Roberts 109 109 0 0.00% 0.25 436.00
230 Glenham Walworth 108 105 3 2.86% 0.33 327.27
231 Stockholm Grant 107 108 -1 -0.93% 0.43 248.84
232 Brandt Deuel 104 107 -3 -2.80% 1.26 82.54
233 Interior Jackson 104 94 10 10.64% 1.34 77.61
234 Badger Kingsbury 103 107 -4 -3.74% 1.06 97.17
235 Canova Miner 103 105 -2 -1.90% 0.31 332.26
236 Cresbard Faulk 103 104 -1 -0.96% 0.41 251.22
237 Herrick Gregory 102 105 -3 -2.86% 0.52 196.15

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 South Dakota

Conforming Mortgages

As of 2018 the conforming loan limit across the United States is set to $453,100, with a ceiling of 150% that amount in areas where median home values are higher. High local affordability makes the $453,100 ceiling apply statewide for single unit homes. Dual unit homes have a limit of $580,150, triple unit homes have a limit of $701,250 & quadruple unit homes have a limit of $871,450. People buying premium properties in the Sioux Falls metro area may be above these thresholds, requiring a jumbo loan. 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 Mount Rushmore 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.

South Dakota Mortgage Programs

First-Time Homebuyer
The South Dakota Housing Development Authority developed this program to help first-time homebuyers afford a mortgage. With this program, applicants will be eligible for a low-interest fixed-rate mortgage loan, and they may be eligible for cash assistance as well. Applicants must also work with a pre-approved lender to be eligible for this program.

In addition to these requirements, there are a few more eligibility requirements that applicants are expected to meet including:

  • Be a first-time homebuyer, or applicants must not have owned a home in the past three years
  • Applicants must meet income limits, and these are county specific
  • Applicants must meet purchase price limits for the property they wish to buy with the program funding

Downpayment Assistance – Fixed Rate Plus
This program is for applicants who have gotten a mortgage through the South Dakota Housing Development Authority. The organization wants to take away any hurdles that may be preventing a person from buying a home, and helping to pay a down payment is a huge step.

Once a borrower has secured funding through one of their mortgages, they should ask about this program. The Fixed-Rate Plus Downpayment Assistance Program will give borrowers up to 3% of their mortgage loan cost as a gift. The borrower never has to worry about repaying this 3%, but the program as a whole carries a higher interest rate.

Community Home Improvement Program (CHIP)
If you've purchased a home and the home needs renovations that you can't afford, this program may be able to help. The CHIP program gives funding in the form of low-interest loans to help homeowners repair and improve their single-family homes. The loan comes with a 2.9% interest rate, and there are a few eligibility requirements.

The applicants will have to have at or below a gross household income of $82,800 for a two-person or under household, or if the household has three or more, the gross household income isn't allowed to exceed $96,600. The monthly payment, loan terms, and loan amounts are done on an individual basis. Also, this program has no minimum loan-to-value ratio, and there are minimal program costs.

GROW South Dakota lists additional programs for homebuyers. The South Dakota Homeownership Education Resource Organization helps teach people to prepare for homeownership. Some cities and counties may also have local programs worth exploring.

Natural Disasters

Flood Insurance

Homeowner's insurance policies typically do not cover flooding. Most of the state of South Dakota is considered to have a very low flooding risk. Minnehaha, home of Sioux Falls, is considered to have a moderate flooding risk.

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.

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.

Tornadoes

The eastern edge of the state is considered to have a moderate tornado risk. A basic homeowners policy should cover financial damages from tornadoes.

Hail

Hail damage is common across the state. Damage from hail is typically covered by home insurance policies.

South Dakota Real Estate Laws

Property Taxes

South Dakota property owners should expect to pay around $1,620 per year on a property with an assessed market value of $126,200. This works out to around 2.88% of the property owner's annual income. These rates do fluctuate by county, and Lincoln County currently collects the highest property taxes at a rate of $2,470 per year. Mellette County collects the lowest property taxes in the state with a rate of $510 per year.

The median single-family home across the state was valued at $195,438 in 2016, yielding an assessment of $2,701 at the state average property tax rate of 1.38%. In Sioux Falls the average single-family home assessment was $2,753.

The national average property tax rate was lower at 1.24%, though nationwide the median home price was much higher at $279,715, yielding an assessment of $3,313.

South Dakota Homestead

South Dakota has a generous homestead program that was put in place to protect people's property during times of financial hardship, medical emergencies, sudden loss of employment, or death. If a resident is older than 69 years of age, they may claim up to $170,000 as a homestead exemption. An urban property has a limit of one acre of property and one acre of mineral land. A rural property has a limit of one hundred and sixty acres for a property and for mineral lands there is a limit of forty acres of a placer claim, and five acres lode mining. Should the person who claimed the homestead die, the homestead will pass to their surviving spouses or children.

Mortgage Structures

Traditional Lien Mortgages – The preferred way for lenders to provide capital to a home buyer wishing to purchase property is through the use of a traditional mortgage. Under this structure, the lender is the mortgagor and the borrower is the mortgagee. After the loan is made, the mortgagor receives a lien against the property. The lien remains in effect until the debt is discharged. When a default occurs the two parties to the agreement are at odds and their dispute must be resolved by a court (see the discussion of judicial foreclosure below).

Deeds of Trust – Unlike a traditional mortgage, a deed of trust is a tripartite agreement between the lender, the borrower, and a neutral third party. The lender is the beneficiary, receiving the interest payments from the borrower, who is known as the trustor. The trustee, the third party to the agreement, is a neutral party who holds the deed to the property in trust until the terms of the agreement are satisfied. The trust agreement allows the trustee to sell the property if certain conditions are met (see the discussion of non-judicial foreclosure below).

South Dakota Foreclosures

South Dakota allows for both judicial and nonjudicial foreclosures, but most mortgage lenders choose not to involve the court system and go through the nonjudicial process. This process is typically a faster foreclosure process, and the mortgage lender won't have as much red tape to get through as they would if they went through the judicial process.

South Dakota is also a recourse state, and this means that a mortgage lender is allowed to sue the defaulted borrower for a limited deficiency once the foreclosure process is over. However, the mortgage lender is limited to the amount they can sue for, and this deficiency is usually defined as the difference between the property's true assessed market value and the total debt.

South Dakota also allows voluntary foreclosure process, and this means that a defaulted borrower will willingly surrender the deed to the property to the mortgage lender. They do this to avoid the foreclosure process, and the mortgage lender usually writes of any deficiency and won't sue the borrower for additional funds.

Foreclosure Procedures and Regulations

The rules that follow are an overview of the basic guidelines for foreclosure in South Dakota. Those who find themselves involved in such a situation are strongly encouraged to consult a professional.

  1. Lenders who have provided capital under a traditional mortgage must proceed against the property of a defaulting borrower through a judicial foreclosure. This means that a complaint must be filed with the court to open a case. The court then oversees the proceedings, making rulings when needed.
  2. If the lender has made the loan under a deed of trust (which is less common in South Dakota), a trustee sale may be used in what is called a non-judicial foreclosure. Under the terms of the trust agreement, the trustee may follow set procedures to sell the property without involving the court.
  3. After a complaint is filed in a judicial foreclosure, the documents involved may take as long as 150 days to process, giving the borrower time to cure the deficiency. South Dakota also requires publication of the foreclosure. This publication must be done for a minimum of 23 days to satisfy the statute and provide sufficient time for the public to become aware of the foreclosure. The logic behind publication is that if the court orders the sale of the property, they want a healthy and robust bidding process to obtain maximum price for the property. South Dakota is a recourse state, so the procedures are designed to help minimize the amount that the borrower may owe the lender after the sale.
  4. The redemption period, the period during which the borrower may repurchase the property at the sale price, is 180 days unless the property is vacant. In the event that the property is vacant, the redemption period is 60 days. The shorter period is in place to protect the bank which may buy the property to cover its loan. If this occurs, the bank should be allowed to leave the house vacant for 60 days to give the borrower the chance to redeem and then sell the property without being concerned that the sale will be undone.

Rocky Mountain Bighorn Sheep in the Badlands.

Additional Resources

Check the following resources to learn more about the South Dakota real estate market.