Planning to buy a house in Iowa as you make your move to Hawkeye State? After all, it’s a state that offers a lot to its residents. Beautiful attractions, pleasant weather, work, and study opportunities, affordable living, you name it. Still, there are things you should have prior knowledge about before you make your move. It is advisable to do your homework so you can adjust better in a newer state with locals.
Keep reading to learn about the state of Iowa and also the housing market before you buy a house in the Hawkeye State.
1- What Is The State Popular For?
There are a few fun facts you should know about the state of Iowa.
- The state has had a nickname called “The Hawkeye State” since 1838. The nickname is in respect to the Sauk leader named “Black Hawk.”
- The state has one of the country’s largest and most well-known annual state fairs to offer to its residents, known as “The Iowa State Fair.”
- The first person to invent sliced bread, “Otto Rohwedder” was born in Iowa in 1927. He created a machine that could slice and wrap bread.
- The Grotto of Redemption is a religious shrine in West Bend with nine caves depicting Jesus Christ’s life. It is home to the world’s largest collection of petrifications and minerals.
- Corn: Iowa is an agrarian state. The state’s 90% of the land is dedicated to agriculture as it is the US’s biggest corn producer.
2- Cost Of Living Is Pretty Affordable
Iowa is among the top 10 most affordable states in the US. The state enjoys a lower cost of living in comparison to the national average. You can enjoy your basic utilities, groceries, entertainment, and transportation costs for a much lower price than the rest of the states. Similarly, the health care and housing sectors are pretty affordable, too.
About 70% of residents in Iowa own their homes. The reason is affordable housing prices. The median home price in Iowa is $184,972. The rents are also pretty cheap in the state.
3- Know The Tax Rates
Before you buy a house in Iowa, know the taxes you have to pay so you can better estimate your budget. Iowa is on the 11th number for having the highest property tax in the US. The state has a property tax of 1.53%. The local sales tax in the state varies from 6%-8%. Lastly, your income tax can vary from 0.36%-8.98%.
4- The State Has Pleasant Seasons
Residents enjoy all four seasons in the state. Winters are utterly cold. Temperatures in January average 14 degrees Fahrenheit in the northwestern part. In the northwest, yearly rainfall averages less than 26 inches (660 mm). In contrast, the southeast observes low 20s Fahrenheit. Here, it averages more than 38 inches (965 mm) of rain. Lowa receives less snowfall in comparison to its neighboring states. Summers are marked by hot and humid weather. Watch out for tornadoes as they occur on a yearly basis. Fooding is also a possibility in Iowa.
5- The Real Estate Market In Iowa
Before you buy a house in Iowa, it’s better to see real estate forecasts and trends. 2022 has been a chaotic year overall for buyers. Several states have observed shortages of houses on the market. The situation is slowly improving in parts of central Iowa.
According to the Iowa Association Of Realtors, high demand was the main reason for low inventory rather than lack of supply. About 70% of residents in Iowa own their homes. The reason is affordable housing prices. The median home price in Iowa is $184,972. The rents are also pretty cheap in the state. So feel optimistic if you plan to buy a house in the state.
6- Expect A Strong Economy With Good Job Opportunities
Iowa is among one of the most stable economies in the United States. A strong and highly-skilled workforce is critical to Iowa’s continuing economic growth and prosperity. If you’re worried about job opportunities in the future, don’t. There are plenty of opportunities for you to land your dream job here.
Iowa’s future plans are to work to ensure that 70% of Iowans complete post-secondary education or training by 2025. This year, the Governor proposes that the state invest more in scholarships and grants to help people get jobs.
7- Know Your Financial Requirements Before You Buy A House In Iowa
The state of Iowa offers a few special housing programs that assist homebuyers with their down payments and closing costs. In order to avail of those benefits, you should be able to meet the state’s eligibility criteria.
- The household income limit is $139,580.
- The home purchase price limit is $381,000
- Iowans can avail of first-time and repeat buyer programs as long as they purchase a house at a primary residence in Iowa.
- The buyer should occupy the house as his primary residence after 60 days of closing.
- The minimum credit score you need is 640.
- The debt-to-income ratio for homebuyers is 45%
8- Mortgage Programs To Buy A House In Iowa
Iowa Finance Authority offers mortgage programs to those who are planning to buy a house in the state.
i- First Home Program
The first home program is designed for first-time homebuyers and military members who have not used the mortgage revenue bond program previously. The program requires a credit score of 640 and a debt-to-income ratio of 45%. Homebuyer education course completion is necessary. The household income limit varies between $79,500-and $114,655.
Benefits of First Home Program
- The program offers lower market rates and fees in comparison to conventional market rates.
- The down payment is based on the loan type. Down payment can be as little as 3%. Program assists with down payments and closing costs to cover upfront costs.
- The Iowa Title Guaranty will cover all your legal expenses to help you get the certificate if any issues regarding defending the title of your house pop up.
9- Homes For Iowans
The Homes for Iowans program is designed for all types of homebuyers. It doesn’t matter if you’re a first-time buyer or not. The credit score should be 640, and the debt-to-income ratio should be 45%. The household income limit should be $139,850.
Benefits of Homes For Iowans Program
- In comparison to traditional market rates, the program offers lower market rates and costs.
- The down payment is determined by the type of loan. A down payment of as little as 3% is possible. To offset upfront costs, the program assists with down payments and closing charges.
- If any complications relating to defending the title of your home arise, the Iowa Title Guaranty will cover all of your legal expenditures to assist you in obtaining the certificate.
10- The Best Time To Buy A House In Iowa
The ideal times to sell a house are in the summer and spring. Prices are high, and there is fierce competition. You are the buyer in our scenario. It is recommended that you buy a house during the winter months. The best times to buy are during the winter and fall seasons. Because sellers want to sell their homes as soon as possible, they offer lower prices.
11- Go For The Right Real Estate Agent In Iowa
One approach for buying a house without using a realtor is to do it yourself. Many people find it more comfortable and less expensive. However, that is only half of the story. Finding a good real estate agent to help you buy a house offers its own set of benefits. For starters, you’ll have more listings to choose from. Agents have more expertise and experience in locating the ideal house for you and negotiating the greatest price.
Don’t worry about the commissions. Commissions aren’t an issue. The vendor is usually the one who has to deal with it. The commission, which is usually between 5% and 6% of the home’s sale price, is usually deducted.
12-Make Sure To Get Your Home Inspections Done When Plan to Buy A House In Iowa
Before you buy a house, it’s advisable to go for an in-depth home inspection by a professional party. Many times sellers forget to mention a few defects in their home. It can be intentional or unintentional. Getting professional inspections before you buy a house will give you a better idea of the physical condition of the house.
Once the home inspection report comes to you, you can go about it two ways. You can reject the deal if you’re not satisfied with the results of the report. Alternatively, you can negotiate the price of the house if you think minor defects can be repaired.
Regentology Can Help You Buy Your Dream House In Iowa
Regentology is an online real estate referral network that connects buyers and sellers with qualified real estate agents. We remove the complication from the process of buying a home for you. Regentology will help you locate a house in Iowa that matches your specific needs. We’ll put you in touch with the best local agents who can help you every step of the way. Simply fill out the form to receive a free consultation.