How to buy a home in South Dakota

South Dakota is a place where people build a bright future, whether you're a first-time buyer, relocating for a career, or ready to start a new chapter in The Mount Rushmore State. Between the beautiful Black Hills and the growing energy of Sioux Falls, it’s easy to understand South Dakota’s appeal.

While the state’s housing market can feel competitive, it doesn’t have to be an obstacle. With preparation and the right support, the home buying journey here can be a smooth and rewarding process. This guide walks you through what to expect, what’s possible, and how to navigate South Dakota’s housing landscape with confidence.

South Dakota’s housing market at a glance

The South Dakota housing market can be competitive, with limited housing in certain areas. Here’s a view of the South Dakota housing market, as of November 2025:

Understanding the housing market in South Dakota

South Dakota’s real estate market is shaped by rising home prices, declining sales, and limited inventory. Here’s what’s driving these trends and what they mean for buyers.

The median home price is $330,600

As of November 2025, South Dakota’s median home price sits at $330,600, about 24% lower than the national median of $433,275. While prices have increased 1.9% year over year, they are influenced by the following factors:

• Location: Prices are highest in metropolitan areas like Sioux Falls and Rapid City, while smaller cities such as Brookings or Aberdeen typically offer lower prices.
• Type of home: Single-family homes, townhomes, and condos vary widely in price depending on size, age, condition, and amenities.
• Fair market value: Appraised and assessed values affect pricing, with properties in sought-after neighborhoods or with desirable features often carrying a premium.

Even with South Dakota’s generally lower prices, affordability can still be a challenge, especially in growing metro areas. To get a clearer sense of what you can afford in your ideal  neighborhood, consider using a home affordability calculator from Rocket Mortgage^®.

Market trends and inventory

South Dakota’s strong job market, lower cost of living, and outdoor recreation draw new residents, increasing housing demand. Harrisburg, Tea, and Deadwood are cities experiencing notable growth. Redfin reported that 11.1% of homes are selling above list price.

There’s important news for buyers: South Dakota’s housing inventory has fallen 8.1% year over year, while the national supply has risen 4.7%. This decline means buyers could still face competition for available homes. The state is also working to expand housing options through land and development incentives and new housing programs.

With many factors shaping the market, guidance of a local real estate agent can help you navigate South Dakota’s housing landscape.

Spring and summer are peak shopping seasons

In South Dakota, spring and summer are generally the best times of year to buy a home. Inventory tends to rise, but also competition increases, especially in May and June when prices are higher and bidding wars are common. If you’re buying during this time, being prepared to act quickly can give you a significant advantage.

Purchasing a home in fall or winter is a different experience. With fewer buyers in the market, you could experience less competition, price reductions, and a more relaxed home buying experience.

How to buy a home in South Dakota: Step-by-step

To navigate the home buying journey, having a clear roadmap is essential. These are the steps to buying a home in South Dakota.

1. Check your credit and set a budget

The first step toward homeownership is understanding your financial health. Start by using a mortgage calculator to estimate your price range and monthly payment. A strong credit score can help with mortgage eligibility and securing better interest rates. Lenders will also look at factors like your debt-to-income (DTI) ratio, employment history, and available assets.

If you’re buying for the first time, set aside funds for key first-time home buyer expenses including your down payment, closing costs, inspection fees, and property taxes.

2. Decide on the type of financing you want

Before touring homes, it’s important to explore your mortgage options. In South Dakota, you’ll have access to several mortgage types, each with its own eligibility requirements, down payment minimums, and benefits:

3. Apply for preapproval

In South Dakota’s housing market, securing mortgage preapproval gives you a powerful start. Preapproval helps estimate your borrowing power and potential 30-year mortgage rate, while showing sellers you’re qualified and serious. It also gives you a clear budget and direction for your home search.

4. Hire a reputable South Dakota real estate agent

Working with an experienced real estate agent is key when purchasing a home in South Dakota. They’ll help you understand the local market, simplify the buying process, and offer insights on property values, regulations, trends, property rights. Redfin is one resource for finding an agent.

It’s also important to note that South Dakota allows dual agency, meaning a single agent can represent both the buyer and the seller. You can also choose to work with an agent who focuses solely on your interests during the transaction.

5. Start house hunting

Once you’re ready, it’s time to start your home search. Work with your real estate agent to look at South Dakota cities and towns that align with your priorities and long-term goals. Browse the latest listings on sites like Redfin or the MLS to see what’s available.

Make sure to attend open houses, both virtually and in person, to get a real sense of the home and neighborhood.

During your search, keep the following factors in mind:

• Education and career opportunities
• Recreation and amenities such as parks, dining, and shopping
• Transportation options like public transit and major roadways
• Homeowners association fees if applicable
• Property taxes

6. Make an offer and negotiate

Once you’ve found a home you love, the next step is submitting an offer. In South Dakota, buyers typically will provide a formal purchase and sale agreement specifying an offer amount, earnest money, contingencies, and a proposed closing schedule.

South Dakota is a full-disclosure state, meaning sellers are obligated to share known material details about the property. It’s also important to note that South Dakota doesn’t require buyers and sellers to hire a real estate attorney, so your agent will guide most of the process.

Many buyers include contingencies to protect their interests during the transaction. For example, an appraisal contingency ensures the home’s appraised value meets or exceeds the agreed-upon purchase price before the sale moves forward.

7. Proceed to close on your South Dakota home

Closing is the final step in the home buying process. You’ll finalize your mortgage, secure homeowners insurance, complete a title search, and pay closing costs. In South Dakota, these costs typically range from 2% to 5% of the purchase price. These could include expenses like loan origination fees, appraisal fees, title insurance, escrow fees, recording fees, and prepaid expenses such as property taxes and insurance.

Once everything is signed and funded, you’ll receive your keys and officially become a South Dakota homeowner.

FAQs about buying a home in South Dakota

Here are some of the most commonly asked questions about buying a home in South Dakota.

How much do I need to buy a house in South Dakota?

The amount you need to buy a home in South Dakota varies based on your city, budget, down payment, and mortgage type. To get a clearer estimate, use tools like the Rocket Mortgage^® affordability calculator.

What credit score is needed to buy a house in South Dakota?

You typically need a credit score of 620 or higher for a conventional loan in South Dakota. Options like FHA loans and other programs may be available with lower scores, but could require higher rates or larger down payments.

Do I need a real estate agent to buy a home in South Dakota?

A real estate agent isn’t required when purchasing a home in South Dakota, but working with one is highly recommended. They can help you navigate the local housing market, handle paperwork, and negotiate the best deal for your home.

How long does it take to close on a house in South Dakota?

It typically takes about 30 to 60 days once your offer is accepted. This varies based on loan type and housing market conditions.

Are there any South Dakota specific factors that could affect the home buying process?

Several local factors can influence your home purchase in South Dakota. The state’s mix of small towns, rural areas, and growing cities like Sioux Falls means property values can vary widely depending on location. Harsh winters and seasonal storms may also affect home inspections, maintenance, and insurance requirements.

Local property taxes, HOA fees, and zoning regulations also can impact your overall budget and home buying timeline.

The bottom line: There’s a home for in South Dakota waiting for you

While home prices can be competitive and the market moves quickly, being financially prepared and working with a real estate agent are important steps. With a high quality of life and easy access to outdoor adventures in the Black Hills and beyond, South Dakota offers a fulfilling lifestyle.

If you’re ready to start your next chapter in The Mount Rushmore State, speak with a Rocket Mortgage^® Home Loan Expert to find the right financing for your new South Dakota home.

Rocket Mortgage is a VA-approved lender, not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency.

Rocket Mortgage is not acting on behalf of FHA or HUD.

The 3% down payment option is only available on certain conventional loan products and is not available in all states. Additional terms and conditions may apply.

This article is for informational purposes only and is not intended to provide financial, investment, or tax advice. You should consult a qualified financial or tax professional before making decisions regarding your retirement funds or mortgage.