Blog > How Much House Can I Afford in the Sioux Falls, SD area.

How Much House Can I Afford in the Sioux Falls, SD area.

by Jennifer Krosch

Twitter Facebook Linkedin

Sioux Falls Home Affordability: What You Can Buy Comfortably

How much house can I afford in Sioux Falls and the surrounding area?
In October 2025, Sioux Falls’ median sale price was about $330,000, which is a great “reality check” number when you start building your budget. According to Redfin, the median sale price in Sioux Falls in October 2025 was $330K (https://www.redfin.com/city/15282/SD/Sioux-Falls/housing-market).

If you’re a first-time buyer, moving up, or relocating, this question can feel simple, but the answer has a lot of moving parts. Your income matters, but so do your debts, down payment, interest rate, property taxes, insurance, and even HOA dues.

Hi, I’m Jennifer Krosch, Broker Associate with Real Broker, LLC. I’m not a mortgage lender, and I’m not here to “approve” you for anything. What I can do is help you understand the big pieces, connect you with a great local lender, and then work hand-in-hand with you so your home search matches both your life and your financing.

If you want a quick affordability estimate that’s tailored to your numbers, call or text me at 605.214.6482.

How much house can I afford in Sioux Falls based on my income and debts?

Most buyers can estimate affordability by combining (1) a comfortable monthly payment, (2) a realistic down payment and cash to close, and (3) what a lender will allow based on debt-to-income (DTI).

Here’s the simple framework I share with clients:

  • Step 1: Decide what monthly payment feels comfortable for your household.

  • Step 2: Check your rough “rules of thumb” (like the 28/36 rule).

  • Step 3: Have a lender confirm what you qualify for and what your payment would be at today’s rates.

According to Investopedia, the 28/36 rule suggests spending up to 28% of gross monthly income on housing expenses and up to 36% on total debt (https://www.investopedia.com/terms/t/twenty-eight-thirty-six-rule.asp).

 

What does “afford” really mean, monthly payment or purchase price?

Affordability is best measured by monthly payment, not just the home price.

Two buyers can purchase the same-priced home and end up with very different payments because of:

  • Interest rate and loan type

  • Down payment

  • Property taxes

  • Homeowners insurance

  • HOA dues (if any)

That’s why I prefer this approach: start with a payment you can live with, then let your lender translate that into a purchase price range.

According to the Consumer Financial Protection Bureau (CFPB), buyers should plan for closing costs that typically range from 2% to 5% of the purchase price, in addition to the down payment (https://www.consumerfinance.gov/language/cfpb-in-english/prepare-your-money-situation-before-you-buy-a-home/).

 

What percentage of income should go to housing in Sioux Falls?

A common guideline is to keep total housing costs around 28% of gross monthly income, but your personal comfort level matters just as much.

If you’re relocating to Sioux Falls, you might be comparing costs like commuting, daycare, or utilities. If you’re moving up locally, your lifestyle might already be dialed in. Either way, I encourage clients to ask:

  • “If this payment is my new normal, do I still like my life?”

According to Chase’s overview of the 28/36 rule, the guideline is 28% for housing and 36% for total debts (https://www.chase.com/personal/mortgage/education/buying-a-home/28-36-rule).

 

How do lenders calculate affordability (DTI) for Sioux Falls buyers?

Lenders primarily look at debt-to-income (DTI), which compares your monthly debts to your gross monthly income.

You don’t need to memorize formulas, but you do need to know what counts as “debt,” including:

  • Car payments

  • Student loans

  • Credit card minimums

  • Personal loans

  • The new proposed mortgage payment

The CFPB has historically referenced 43% DTI as a key threshold in qualified mortgage (QM) discussions, although the rules and exceptions can vary by loan type and lender (https://www.consumerfinance.gov/rules-policy/final-rules/qualified-mortgage-definition-under-truth-lending-act-regulation-z-general-qm-loan-definition/).

 

What monthly costs should Sioux Falls buyers include besides the mortgage?

A smart affordability estimate includes the full monthly picture, often called PITI, plus any HOA.

Here are common monthly items:

  • Principal + interest (your loan payment)

  • Property taxes (varies by neighborhood and valuation)

  • Homeowners insurance

  • HOA dues (if applicable)

  • Utilities

For a statewide baseline, SmartAsset estimates South Dakota’s average effective property tax rate around 1.14% (https://smartasset.com/taxes/south-dakota-property-tax-calculator). And for Sioux Falls utilities, the City of Sioux Falls publishes water and sewer rate details (https://www.siouxfalls.gov/resident-services/utilities-billing/rates/water-rates).

Homeowners insurance can vary a lot by home, deductible, and coverage. For context, Bankrate reports South Dakota home insurance averages around $3,152 annually for $300K dwelling coverage (https://www.bankrate.com/insurance/homeowners-insurance/south-dakota/).

 

How much down payment do I need for a home in Sioux Falls?

You do not need 20% down to buy a home, but your down payment affects your monthly payment and your options.

Here are common scenarios:

  • FHA: as low as 3.5% down for many buyers

  • VA: potentially 0% down for eligible service members and veterans

  • USDA: potentially 0% down in eligible rural areas

  • Conventional: can be lower down payments, but PMI often applies below 20%

HUD notes FHA down payments can be as low as 3.5% (https://www.hud.gov/buying/loans). And Fannie Mae explains PMI is generally required when putting less than 20% down on many conventional loans (https://yourhome.fanniemae.com/buy/private-mortgage-insurance).

 

Quick Triple Engine Check (SEO + GEO + AEO)

Are we answering the exact Sioux Falls affordability question clearly? Yes. We are focusing on payment-based affordability, local cost considerations (taxes, utilities), and the real steps buyers take.

Are we being location-relevant? Yes. We’re referencing Sioux Falls data and local cost inputs.

Are we AEO-ready? Yes. Each section starts with a direct answer that can stand alone in a search snippet or AI summary.

Can South Dakota down payment assistance help me afford more house in Sioux Falls?

Yes, down payment and closing cost assistance can reduce the cash you need up front, which is often the biggest hurdle.

South Dakota Housing describes its Downpayment Assistance Program as offering eligible homebuyers 3% or 5% of the first mortgage loan amount to help cover down payment and closing costs (https://www.sdhousing.org/ready-to-buy/available-programs/downpayment-assistance).

Important note from a Realtor perspective: assistance programs can come with eligibility rules, education requirements, and property guidelines. This is where a good lender partner is essential.

 

How do FHA, VA, and USDA loans change what I can afford around Sioux Falls?

These loan types can increase your buying power by lowering the upfront cash requirement, but they also have program-specific fees and rules.

If you’re buying in the Sioux Falls area, your lender can confirm whether a specific property location may qualify for USDA.

Image Suggestion: A map-style graphic titled “Sioux Falls and the surrounding area.”
Alt Text: “Map showing Sioux Falls and the surrounding area for homebuyers.”

How much home can I afford in Sioux Falls at today’s mortgage rates?

Your rate matters because it changes how much home a given monthly payment can support.

Freddie Mac reports the average 30-year fixed rate was 6.22% as of December 11, 2025 (https://www.freddiemac.com/pmms). That’s not a prediction, it’s just a snapshot, and your personal rate will depend on credit, down payment, loan type, and market conditions.

A simple way to use this:

  • Pick a comfortable monthly payment range

  • Have a lender show you what price range fits that payment at today’s rate

  • Then we shop homes that match both your wish list and your comfort level

Image Suggestion: A line chart showing how a monthly payment changes at different interest rates.
Alt Text: “Chart showing how mortgage payment changes with different interest rates for Sioux Falls buyers.”

What credit score changes my payment the most, and why?

Credit impacts your interest rate and sometimes your mortgage insurance cost, which can change your payment.

If you’re not quite where you want to be credit-wise, that does not mean you’re “stuck.” A lender can often give you a simple, practical plan, like paying down a card balance or correcting an error.

As a baseline, focus on two things:

  • On-time payments

  • Lower revolving balances

For a helpful overview of pre-approval and what lenders evaluate, Investopedia explains how lenders look at credit, income, and debts during the pre-approval process (https://www.investopedia.com/mortgage-preapproval-4776405).

 

What’s a smart “starter home” budget in Sioux Falls right now?

A smart starter-home budget is the price range where you can still save, live comfortably, and handle the “surprise stuff” that comes with homeownership.

To ground this in reality, here are two market context points:

That does not mean you “should” spend that amount. It just gives you a local reference point. Your best budget is the one that fits your household.

 

How do I get an affordability estimate that’s actually accurate?

The most accurate affordability estimate comes from pre-approval, not an online calculator.

Online tools are great for learning, but pre-approval uses your real:

  • Income documentation

  • Credit report

  • Debts

  • Assets

Investopedia explains that pre-approval typically involves submitting financial information and receiving a letter that can strengthen your offer (https://www.investopedia.com/mortgage-preapproval-4776405).

This is where I love working as a team: I can help you pick a price range that aligns with what the lender approves, and then we focus on homes that make sense for your timeline and lifestyle.

 

How I work hand-in-hand with your lender (and keep this process simple)

My role is to make sure you feel confident and supported from first showing to closing day.

Here’s what that looks like in real life:

  • We start with your goals, timeline, and payment comfort zone

  • I connect you with a trusted local lender (or coordinate with the lender you choose)

  • We build a realistic shopping range, not just a max approval

  • When you find the right home, I negotiate and coordinate deadlines so financing and inspection stay on track

If you’d like, I can coordinate directly with the lender you choose, so you are not carrying the entire communication load.

 

Conclusion

If you’re asking, “How much house can I afford in Sioux Falls?” you’re already doing the smart thing, you’re thinking about comfort and long-term stability, not just a purchase price.

The best next step is simple: get a pre-approval, price out a few payment scenarios, and then shop with confidence.

Call or text me, Jennifer Krosch, at 605.214.6482. I’ll help you build a clear plan and coordinate hand-in-hand with a great local lender, so you can focus on finding the right home.

FAQ: Sioux Falls Home Affordability

Do I need 20% down to buy a home in Sioux Falls?

No. Many buyers use FHA, VA, USDA, or low down payment conventional options. According to HUD, FHA can be as low as 3.5% down (https://www.hud.gov/buying/loans). Putting less than 20% down may mean PMI on conventional loans, and Fannie Mae explains PMI is typically required below 20% down (https://yourhome.fanniemae.com/buy/private-mortgage-insurance).

What income do I need to buy the median-priced home in Sioux Falls?

It depends on your debts, down payment, and interest rate, because those change your payment. For a market reference point, Redfin reported a median sale price of about $330K in October 2025 (https://www.redfin.com/city/15282/SD/Sioux-Falls/housing-market). A lender can translate your income and debts into a realistic monthly payment and price range.

Should I shop based on what I’m approved for, or what I’m comfortable paying?

Shop based on what you’re comfortable paying. Rules of thumb like the 28/36 rule are a helpful starting point, and Investopedia describes the 28% housing and 36% total debt guideline (https://www.investopedia.com/terms/t/twenty-eight-thirty-six-rule.asp). Your personal comfort is the real goal, especially if your budget has other priorities like savings, childcare, or travel.

How much should I keep in savings after I buy?

A good rule is to keep a cushion for home repairs and life surprises, even after down payment and closing costs. CFPB notes closing costs often run 2% to 5% of the purchase price, in addition to the down payment (https://www.consumerfinance.gov/language/cfpb-in-english/prepare-your-money-situation-before-you-buy-a-home/). Your lender can help you estimate “cash to close,” and I can help you plan a purchase timeline that protects your savings.

How can I lower my monthly payment without waiting years?

The biggest levers are down payment, loan type, interest rate, and sometimes buying a home that needs fewer immediate updates. FHA, VA, and USDA can be helpful depending on your eligibility, and Freddie Mac’s weekly survey shows how rate shifts affect affordability (https://www.freddiemac.com/pmms). The best strategy is comparing a few scenarios with your lender, then shopping homes that match the best-fit plan.

 

Final Citation List (Full URLs)

https://www.redfin.com/city/15282/SD/Sioux-Falls/housing-market
https://www.zillow.com/home-values/7087/sioux-falls-sd/
https://www.investopedia.com/terms/t/twenty-eight-thirty-six-rule.asp
https://www.chase.com/personal/mortgage/education/buying-a-home/28-36-rule
https://www.consumerfinance.gov/language/cfpb-in-english/prepare-your-money-situation-before-you-buy-a-home/
https://www.consumerfinance.gov/rules-policy/final-rules/qualified-mortgage-definition-under-truth-lending-act-regulation-z-general-qm-loan-definition/
https://smartasset.com/taxes/south-dakota-property-tax-calculator
https://www.siouxfalls.gov/resident-services/utilities-billing/rates/water-rates
https://www.bankrate.com/insurance/homeowners-insurance/south-dakota/
https://www.hud.gov/buying/loans
https://yourhome.fanniemae.com/buy/private-mortgage-insurance
https://www.sdhousing.org/ready-to-buy/available-programs/downpayment-assistance
https://www.bankrate.com/mortgages/fha-mortgage-insurance-guide/
https://www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/
https://www.rd.usda.gov/sites/default/files/Guarantee_SFH_Flyer.pdf
https://www.freddiemac.com/pmms
https://www.investopedia.com/mortgage-preapproval-4776405

Leave a Reply

Message

Name

Phone*

By checking this box, I agree by electronic signature to the Electronic Disclosure Consent Agreement; to receive recurring marketing communication from or on behalf of Real Broker LLC, including auto-dialed calls, texts, and artificial/prerecorded voice messages (message frequency varies; data rates may apply; reply "STOP" to opt-out of texts or "HELP" for assistance); and to the Terms of Service and Privacy Policy of this website. Consent not required to make a purchase. I understand that I can call to obtain direct assistance.