South Dakota’s cost of living offers a blend of affordability and value, making it an attractive option for those seeking a high quality of life in a scenic setting. With housing costs well below national averages and no state income tax, the state provides financial relief for both homeowners and renters. However, some expenses, like healthcare and groceries, may run higher than expected, highlighting the importance of budgeting. Whether you’re drawn to the bustling streets of Sioux Falls or the historic charm of Rapid City, understanding the full scope of South Dakota’s cost of living is key to planning your move.
Housing costs: Median home prices and average rent in South Dakota
Housing in South Dakota is generally affordable compared to the national average. The median home sale price in the state is $330,100, significantly below the national median of $428,000. Renters also benefit from lower costs, with the average rent in South Dakota at $965 per month, much less than the national average of $1,645. Larger cities like Sioux Falls and Rapid City tend to have higher housing costs, reflecting their popularity and amenities. On the other hand, more affordable places to live can be found in smaller towns like Pierre or Aberdeen, where both rental prices and home values are considerably lower. Whether you’re renting or buying, South Dakota offers a range of options to suit different budgets.
South Dakota housing costs: Average rents and median home sale prices
| City in South Dakota | 1 Bed Avg. Rent | 2 Bed Avg. Rent | Median Home Sale Price |
| National Average | $1,495 | $1,725 | $428,000 |
| Sioux Falls | $951 | $1,090 | $335,000 |
| Rapid City | $1,192 | $1,250 | $352,000 |
| Aberdeen | $899 | $1,280 | $218,000 |
| Brookings | $1,185 | $1,403 | $265,000 |
| Watertown | $984 | $1,420 | $245,000 |
| Brandon | $563 | $875 | $415,000 |
| Pierre | $1,485 | $1,782 | $260,000 |
| Vermillion | $671 | $1,269 | $135,000 |
Housing costs in popular cities in South Dakota
Sioux Falls
Sioux Falls is South Dakota’s largest city, offering an urban environment full of amenities. Renters can expect to pay around $951 per month for a one-bedroom apartment and $1,090 for a two-bedroom, well below national averages. For those looking to buy, the median home sale price is $335,000, making it one of the more expensive cities in the state for homebuying. Sioux Falls is known for its robust job market, amenities, and scenic spots like Falls Park.
Rapid City
Near the Black Hills, Rapid City is perfect for those seeking outdoor adventure and city life. Average rents here are higher, at $1,192 for a one-bedroom and $1,250 for a two-bedroom. Additionally, the median home price is also on the higher end at $352,000. Residents enjoy access to nearby national parks and landmarks like Mount Rushmore and Badlands National Park.
Aberdeen
Aberdeen has small-town charm with a more affordable cost of living. Renters can find one-bedroom apartments for an average of $899 and two-bedroom units for $1,280. Homebuyers will appreciate the median home price of $218,000, one of the most affordable in South Dakota. Aberdeen’s slower pace and welcoming atmosphere make it a great place to live.
Brookings
Brookings is a bustling college town home to South Dakota State University, giving it a youthful and energetic vibe. Renting in Brookings costs about $1,185 for a one-bedroom apartment and $1,403 for a two-bedroom. The median home sale price is $265,000, making it a moderately priced city for homebuyers.
Cost of utilities are on the low end
Utility costs in South Dakota are generally affordable compared to national averages. Residents typically spend around $128 per month on electricity, lower than the national average. Additionally, natural gas, water, and other utility expenses even lower overall costs, making the state’s utility bills manageable for most households. Winter heating costs can rise due to the state’s cold climate, but modern energy-efficient homes and available assistance programs help mitigate these expenses. On average, you can expect to pay around $555 per month for all utilities combined, depending on the size of your home and energy usage.
Energy bill comparisons: South Dakota cities vs. nationwide average
| Monthly Energy Bill | Monthly Phone Bill | Comparison to National Avg. | |
| National Average | $203.40 | $194.11 | |
| Sioux Falls | $157.50 | $196.86 | -13% less |
| Rapid City | $159.69 | $196.15 | -13% less |
| Pierre | $142.10 | $196.15 | -18% less |
Data from Redfin’s Cost of Living Calculator, November 2024
Expect to pay 19% less on groceries than the average person
Groceries in South Dakota are notably more affordable, with residents spending about 19% less per month compared to the national average. This translates to significant savings, particularly for larger households. Local grocery chains and farmers’ markets provide fresh, budget-friendly options, and the state’s agricultural roots ensure access to high-quality, locally-sourced produce, dairy, and meat. Whether shopping in larger cities like Sioux Falls or smaller towns, residents benefit from a cost-effective food supply that keeps monthly grocery bills well below the national median.
Relatively cheaper cost of transportation
Transportation in South Dakota is relatively affordable, with gas prices averaging $2.84 per gallon, lower than the national average of $3.04. However, the western part of the state, including areas near Rapid City, tends to experience slightly higher fuel costs due to supply chain factors and tourism demand near Mount Rushmore and other attractions. For those relying on public transit, services like Sioux Area Metro in Sioux Falls offer bus fares at $2 per ride or $30 for an unlimited monthly pass, making it an economical choice for commuters. However, options for public transportation are limited outside major cities, so owning a car is often essential in rural areas.
Higher health care costs can be expected
Health care costs in South Dakota are generally higher than the national average, with residents facing elevated expenses for routine and specialized care. For instance, a doctor’s visit in Sioux Falls is approximately 10% higher than the national average, reflecting the limited provider availability in some areas and increased demand. On average, South Dakota residents can expect annual health care expenditures to exceed the national per capita average. In fact, health care expenses in South Dakota were the second highest in the country. This makes budgeting for medical expenses an important consideration when assessing the overall cost of living in the state.
South Dakota has a friendly tax environment
South Dakota is known for its tax-friendly environment, especially for those looking to avoid high state income taxes. The state does not levy an income tax, which can be a major draw for residents seeking to reduce their overall tax burden. Instead, South Dakota relies on sales taxes and property taxes. The statewide sales tax rate is 4.2%, with localities adding their own taxes, bringing the total rate in some areas to as high as 6.11%. Property taxes are relatively moderate compared to national averages, with rates varying by county. Overall, South Dakota’s tax structure provides residents with a more favorable financial situation, especially for individuals with higher incomes or those looking to maximize their savings.
How much do I need to earn to live in South Dakota?
To live comfortably in South Dakota while adhering to the 30% rule, renters should aim to spend no more than 30% of their gross monthly income on housing. For example, the average rent in South Dakota is $965, which means you should earn at least $3,217 per month, or about $38,604 annually before taxes. If you are looking for a two-bedroom apartment in sioux Falls, with an average rent of $1,090 per month, your monthly income should be at least $3,633, or around $43,600 annually. However, be advised that you’ll be paying more in healthcare, even as utilities, groceries and transportation costs are lower.
Methodology
Average 1-bedroom and 2-bedroom rent sourced from Rent. Median home sale price, state average monthly rent, national rent prices, and cost of living data sourced from Redfin.
