MITCHELL, S.D. (MITCHELLNOW) Average first-time homebuyers can expect to spend about two-fifths of their pre-tax income on a monthly payment for a house in South Dakota.
Jared McEntaffer the CEO of Dakota Institute called home prices one of the biggest economic issues the state faces in an address to the Governor’s Conference on Economic Development.
He said the median home listing price increased by an inflation-adjusted 26% from the second quarter of 2020 to the first quarter of 2024 in South Dakota, compared to a national average of 11%.
A buyer capable of putting down 3% on a median-priced home in 2017 would have faced a monthly mortgage payment of $1,270. By 2023, due to rising interest rates and home prices, that figure soared to $2,325; with private mortgage insurance and home insurance included, the total monthly cost climbs to $3,271.
McEntaffer also shared some positive news. He said employment since 2014 is up nearly 11% in South Dakota, compared to about 7.3% in Minnesota and negative 3% in North Dakota. South Dakota has one of the fastest growing labor markets in the region.
His analysis highlighted high housing costs compared to incomes, posing a challenge for attracting new workers.