Compare Current Mortgage Rates in Kansas

Despite the relatively low housing demand in Kansas, prices have continued to slowly grow over the years. Home price appreciation has slowed since the pandemic spike, but prices are still rising thanks to limited inventory. The number of homes for sale in the Sunflower State has been falling since before the pandemic and has only recently started to rebound.

The hardest-hit sector has been new builds of modest size. Since the pandemic, wealthy buyers who wanted larger, custom homes were relatively unaffected by market forces. However, the recent rising prices and interest rates have priced out many would-be homebuyers of smaller Kansas homes.

The median sales price for Kansas homes is $245,000 — well below the U.S. median of $402,523. Sale prices are still rising, and how much they increase will be influenced by the mortgage rates for 2024. Read on for what to expect from Kansas mortgage rates during the upcoming year.  

On a national level, mortgage rates tend to be around 2% higher than the Treasury yield, so mortgage interest rates are indirectly linked to the bond market as they have to be more competitive than these securities to accommodate the additional risk.

Additionally, the federal funds rate (set by the Federal Reserve) is the interest rate that banks charge each other. This effectively limits how low mortgage rates can go, and lenders charge borrowers a premium on this rate. To reduce inflation during 2022 and 2023, the Federal Reserve raised these rates, which resulted in a rise in mortgage rates across the United States.

The demand for housing in Kansas is not as strong as it is in more populous states. However, low inventory has buoyed prices in recent years. The National Association of REALTORS® predicts that interest rates will dip to 6.3% by the end of 2024, which, if paired with an increased number of newly built homes, could make housing more affordable for future Kansas homebuyers.

The Kansas Housing Resources Corporation is a nonprofit, public corporation that administers several federal housing programs in Kansas. Additionally, there are other private community programs and organizations that can help aspiring homebuyers on their financial journey, such as savings match programs and down payment assistance.

Here are the ones that the Kansas Housing Resources Corporation (KHRC) offers:

• Down payment assistance: This offers an interest-free loan for 15% or 20% of the home’s purchase price; the loan is forgiven if you stay in the home for 10 years. You must be a first-time homebuyer (or not have owned a primary residence for the past three years). The income limit is at or below 80% of the median income for the area. You must make a contribution toward the down payment of more than 1% but less than 10%. 
• First-Time Homebuyer Savings Account: Aspiring first-time homeowners can open a savings account at any qualified financial institution to save for a home purchase. Your contributions could qualify you for a tax deduction of up to $3,000 for an individual or $6,000 for joint filers on your Kansas state income tax. Monies can be used for a down payment and/or closing costs.
• Home Loan Guarantee for Rural Kansas: These funds don’t go to the homeowner directly, but this program guarantees the amount of the loan that exceeds 80% of the home’s value (up to $100,000) for the lending institution. It’s available in eligible Kansas counties with a population under 10,000.
• City/county programs: Several cities and counties in Kansas offer first-time homebuyer assistance programs. Locations include the cities of Leavenworth, Topeka, Wichita, Hutchinson, and Lawrence, as well as Wyandotte and Johnson counties. Programs range from down payment assistance to help with rehabilitation and repair, so make sure you check for programs in the area where you want to buy.

While you can’t influence what the level of mortgage interest rates are at large, you can position yourself to get the best rate possible. If you’re looking to purchase a home, these are a few key steps to take to ensure you get the lowest mortgage rate possible:

• Raise your credit score: This is one of the key factors lenders look at to determine whether to issue you a mortgage because it shows how reliable you are. Get a copy of your credit report and rectify any errors. Check what you can do to raise your score if needed.
• Save a large down payment: You are a more attractive mortgage applicant if you can make a large down payment, as lenders see your loan as less risky. Save all you can, and see if you qualify for down payment assistance programs to help.
• Choose a shorter-term loan: Fifteen-year mortgages tend to have lower interest rates than 30-year mortgages. If you can afford the larger monthly payment, you’ll pay less interest over time if you shorten the loan’s term.
• Compare lenders: Get pre-approved with several different lenders to see what terms and rates they offer. Choose the best few, and ask them if they can beat the terms of the others so you can get the best interest rate.

Of the mortgage types available in Kansas, some of them (FHA, VA, USDA) are backed by a federal agency, so they come with specific requirements. However, these loans are underwritten and administered by individual lenders that also set qualification guidelines. Other loans (conventional and jumbo) are backed by the lenders.

Conventional

• Description: A typical mortgage issued by a bank, credit union, or mortgage lender.
• Min. credit score: 620.
• Max. debt-to-income ratio (DTI): 45%
• Min. down payment: 3%
• Mortgage insurance if less than 20% down?: PMI is usually required.
• Notes: Some conventional loans don’t require PMI, but they generally have high interest rates.

VA

• Description: Loans backed by the Department of Veterans Affairs.
• Min. credit score: Varies by lender.
• Max. debt-to-income ratio (DTI): 41%
• Min. down payment: 0%
• Mortgage insurance if less than 20% down?: No.
• Notes: Only veterans, service members, and surviving spouses may qualify.

USDA

• Description: Loans for low- to middle-income borrowers in rural areas.
• Min. credit score: 640
• Max. debt-to-income ratio (DTI): 41%
• Min. down payment: 0%
• Mortgage insurance if less than 20% down?: No PMI; annual fee instead.
• Notes: Fees are typically rolled into monthly mortgage payments.

FHA

• Description: Mortgages insured by the Federal Housing Administration.
• Min. credit score: 580 for most; 500 with 10% down payment.
• Max. debt-to-income ratio (DTI): 43%
• Min. down payment: 3.5%
• Mortgage insurance if less than 20% down?: Must pay MIP.
• Notes: Mortgage insurance includes both an upfront and monthly payment.

Jumbo

• Description: Mortgages too large to be conventional loans.
• Min. credit score: 720 but varies by lender.
• Max. debt-to-income ratio (DTI): Around 43%.
• Min. down payment: 10%
• Mortgage insurance if less than 20% down?: Yes, typically required.
• Notes: Total limits for conforming jumbo loans are based on geographic location.