From coastal calm in Bethany Beach to the rich sense of history in the capital of Dover, there are so many scenic spots to call home in Delaware. Buying a house here has gotten increasingly difficult throughout the pandemic, though. Median sale prices in the First State climbed to $350,000 in August 2022, an 18.6 percent increase over August 2021, according to data from Delaware Realtors.

Pair those rising home prices with today’s rising mortgage rates, and you may be contemplating a big question: Should you buy a house now, or wait? The market is certainly creating plenty of challenges, but if your long-term plans are in Delaware, it’s smart to figure out how to stop renting and start building equity now.

As you get ready to buy a house in the First State, this guide can help you understand what the market looks like in different areas, where you might be able to find some help with your down payment and how to turn your dream of buying a home in Delaware into a reality.

How to buy a house in Delaware

Decide where to live in Delaware

As you think about where to live in Delaware, you don’t have to cast a very wide net. The 1,982 square miles of ground here make it the second-smallest state in the country. (Only Rhode Island is smaller.) So, no matter where in the state your home is, you’ll still be a fairly short drive from the beautiful beaches at its southernmost end. And if you’re looking at the Wilmington area, you’ll only be about 30 miles from Philadelphia.

While Delaware is tiny, there is a fairly sizable difference when it comes to the budget you’ll need to buy throughout the state. Median prices in Sussex County, home to beach towns like Dewey, Rehoboth and Bethany, hit $410,000 in August 2022. Kent County, in the middle of the state, offers the most affordable price point with median prices of $320,000. And the median in New Castle County — at the northern tip of the state and home to its only big city, Wilmington — is $350,000. Some areas surrounding the city of Wilmington can run well above the million-dollar range.

Don’t think just about the cost of the home, though. Consider the cost of everything else, like utilities, gas, food and other essentials, to determine which parts of Delaware will offer a more affordable place to call home. If you’re moving here from out of state, be sure to use Bankrate’s cost of living calculator to get a sense of how far your income will take you versus your current home.

Tips for buying a house in Delaware

As you start comparing mortgage rates in Delaware, it’s important to understand the state’s conforming loan limit, which is the same in each of the three counties: $647,200. If you need to borrow more than that, you’ll be crossing into jumbo loan territory, and you’ll need a strong credit score (likely at least 700) and a bigger down payment.

If you’re looking for an FHA loan, you’ll have a much lower ceiling: $420,6080 in Kent and Sussex counties and $477,250 in New Castle County.

Things to know about buying a house in Delaware

  • Closing costs: Delaware’s closing costs are the highest in the country behind Washington, D.C., due to a 4 percent real estate transfer tax. In 2021, the average Delaware home purchase included $17,859 in closing costs, according to data from ClosingCorp. There is some relief, though: The seller typically pays half of the transfer taxes here. And if you’re a first-time homebuyer in New Castle County, you get a discount on a portion of the transfer tax.
  • Property taxes: The good news is that property taxes here are fairly low. Tax Foundation data shows that the typical Delaware homeowner pays $967 of property taxes per year, which is the ninth-lowest bill in the country.
  • Dual agency: Dual agency, an arrangement in which the same real estate agent represents the buyer and the seller in the same transaction, is legal in Delaware. If this is the case, though, you need to give your consent in writing.
  • Seller’s disclosure: All home sellers in Delaware are required to share a property disclosure form that indicates their knowledge of any material defects. It’s an important document to review to get a sense of any existing issues with areas like the electrical wiring, roof and foundation — but it should not replace a professional home inspection.
  • Attorneys: Delaware law requires you to hire an attorney to supervise the contracting process and oversee the closing. So, be sure to compare options for real estate attorneys to find one who has plenty of experience and can help make your homebuying experience as smooth as possible.
  • Climate and weather considerations: Delaware is a coastal state, with plenty of Atlantic shoreline and rivers. (George Washington famously crossed the Delaware River during the Revolutionary War, after all.)  Around 22,000 Delawareans live in homes that are at risk of coastal flooding, and that number is poised to increase as sea levels rise. As you look at properties, be sure to ask whether they are located in a flood plain, and find out how much more you’ll need to pay for flood insurance, which is not part of standard homeowners insurance.

How much house can I afford in Delaware?

Are you ready to buy a house in Delaware? The first ingredient you’ll need is a good credit score. If you have at least a 620, you’ll be in the running to qualify for a mortgage, but a higher score (740 and above) will help you score a better interest rate. The second piece of the puzzle involves your future plans. Do you intend to stay in the home for a long time? Since closing costs in Delaware are so high, you need to be reasonably sure that you will live in the home long enough to justify all the one-time fees. Five years is a good benchmark, but a longer period is even better.

Once you feel ready, use Bankrate’s new-home calculator to look at your entire financial picture. It can help you figure out how much you should spend each month on your mortgage payment and still feel comfortable about your other financial needs like saving for retirement and paying down any other debts.

Saving for a down payment in Delaware

The average down payment on a new home in Delaware was more than $48,000 in the spring of 2022. While that figure might be daunting, there is help available for that upfront payment. One of the Delaware State Housing Authority’s programs for first-time homebuyers includes a second mortgage that can cover between 2 and 5 percent of the purchase price. While you’ll need to pay the money back when you move out, sell or refinance, it’s a zero-interest loan, which means your balance will never increase.

Down payments can be especially challenging if you’re earning less than you would like to, but there are ways to buy a house with a low income that include down payment assistance programs. In Wilmington, for example, eligible borrowers earning less than the specified amount may be able to get $15,000 of assistance for down payment and closing costs. Plus, you might not have to pay the money back; the loan is forgiven if you live in the home for 10 years.

Get preapproved for a mortgage

Getting preapproved is an essential step on the road to becoming a homeowner, in Delaware or anywhere. Every seller will want to see that a lender has already taken a look at your finances and given you the preliminary OK. This is a fairly simple process that involves handing over your financial information (pay stubs, tax returns and bank statements) over to a lender. Some online lenders can issue a preapproval letter within 15 minutes.

Find the right lender

The lender that preapproves you for a mortgage doesn’t have to be the lender you actually count on for your home purchase. It’s important to compare offers from multiple lenders in Delaware to find terms that fit your finances. Look at the APR to understand the true cost, and ask about the fees the lender charges, along with how quickly they expect to close your deal.

Find the best local real estate agent in Delaware

You might think that due to Delaware’s small size, you can navigate the housing market on your own. How hard can it be to find a place to live? Well, it can be very challenging in certain parts of the state. For example, the number of new listings in New Castle County dropped by nearly 25 percent between August of 2021 and 2022, according to Delaware Realtors. A knowledgeable local real estate agent can make a huge difference in this kind of competitive market. Buying a home can be a whirlwind, and your agent can help keep you on track and point you toward listings that meet your lifestyle and budget needs.

Start house hunting and make an offer

Now, it’s time for the exciting part: actually finding a home you want to buy. Go into this phase with knowledge of your must-haves — a garage for parking or a home office if you’re working remotely, for example — versus simply nice-to-have amenities, like a pool or a finished basement. When you find a place that you love, your agent will be your most valuable resource and help you submit a compelling offer.

Get a home inspection and appraisal

The seller accepting your offer is a huge step, but it’s not quite time to celebrate yet. You should make sure that your contract includes a home inspection contingency and so that a professional can look for any glaring issues that might make you think twice about the purchase. In addition to an inspection, your lender will require an appraisal. This process helps them ensure that the property is worth at least the amount they’re loaning you for it. That way, if you ever default on the loan, they can recoup their losses.

Final walk-through and closing on your new Delaware home

Make sure you schedule a final walk-through just before you’re ready to close. This is an opportunity to verify that the seller has left the house in the condition you were promised and that any repairs you negotiated in the contract have been addressed. There’s no professional inspector involved this time, though. It’s all up to you, so use this checklist to make sure you don’t miss anything.

If everything looks good, it’s time to close on the house. Ask your attorney how you will be expected to pay the closing costs — typically via a certified or cashier’s check or a wire transfer. He or she will be with you at the closing, walking you through all the places you need to sign your name. Get ready, because this requires a lot of autographs. Once you’re done, the keys are yours. Congratulations on closing a big deal in a small state: You are officially a Delaware homeowner.


  • There are plenty of great reasons to buy a house in Delaware: low property taxes, 380 miles of shoreline and significantly cheaper living than other areas along the East Coast like Boston, New York and Washington, D.C. While you’ll have to deal with high closing costs on the purchase, you’re in the clear after that big upfront price tag — plus, the state has no sales tax.
  • Qualifying for a loan to buy a house requires a good credit score — 620 minimum, but above 700 is better — as well as a low debt-to-income ratio and enough money in your savings to cover a down payment and closing costs. If you have a less-than-stellar credit history, you’re likely better off looking at FHA loans. Some FHA lenders are willing to approve a credit score as low as 500, if you can come up with a 10 percent down payment.
  • If you have excellent credit and qualify for a conventional loan, you’ll need to be able to contribute at least 3 percent of the home’s purchase price to a down payment. If you have subpar credit or you’re looking to borrow a larger amount of money with a jumbo loan, you’ll need more cash — likely at least 10 percent of the purchase price. The down payment isn’t your only cash concern, though. Delaware has the highest closing costs in the country behind Washington, D.C., and you’ll need to cover your portion of that bill as well.