Rent vs buy in South Dakota
Over 7 years, at today's numbers, renting comes out ahead in 2 of the state's 2 cities of 50,000+.
Renting or buying in South Dakota's cities
| City | Verdict | 7-year result | Break-even (up to 30 yrs) | Typical home | Rent /mo |
|---|
Sources: Zillow Home Value and Observed Rent indexes. Verdicts come from our rent vs buy method, with 20% down over 7 years.
Our take on South Dakota
Across South Dakota's 2 cities of 50,000+ people, you get a clear answer. Over 7 years, our numbers show renting ahead in 2 of the state's 2 big cities. In Sioux Falls, a typical home costs $330,625, and monthly rent comes to $1,279. If you stay 7 years, renting comes out ahead by $54k. You won't break even there within 30 years, because the rent you save each month is so large.
Head west to Rapid City and the gap is almost the same. There, a typical home costs $360,913, while rent goes for $1,445 a month. Renting wins by $52k over 7 years, with no break even until year 23. Across the state, a typical home is worth $318k. Meanwhile, the median rent across all renters is $946 a month, which saves you plenty compared with the $1,413 a month US median. Here, just 31% of households rent, which is below the 35% US share. Even so, housing is a great deal for 114,923 renter households.
Yearly owner bills also tip the scales toward renting. In South Dakota, the property tax rate you'll pay is 1.06%, above the 0.94% US rate. Homeowners insurance costs you more as well. That runs you $1,454 a year, compared with $1,308 a year across the US. Since 1995, we've seen home prices grow 4.5% a year, and 6.8% a year during the last 10 years. Even so, paying higher tax and insurance bills slows the return buying gives you.
Our take: across South Dakota, low rents plus higher owner bills point to renting over 7 years. Rent and invest what you save, and you'll come out ahead, unless you stay put for 23 years.