Looking to buy a house in Rhode Island?
Currently, the median home value in Rhode Island is $469,927 — and it's projected to rise by 2.90% in the next year.[3]
The current median sale price in Rhode Island is $522,800, which is 9.08% lower than the median listing price of $575,000.[4]
Our guide breaks down the process of buying a house in Rhode Island in eight steps, with practical tips to help you navigate the Rhode Island housing market. With the help of a good real estate agent, you’ll be buying your next home in no time.
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Step 1: Save for a down payment
Your down payment is the first part of your home's purchase price that you pay at closing. Your mortgage lender pays the remaining balance.
A down payment can be up to 20% of the home's final price. In Rhode Island, that could mean paying up to $104,600 for a $469,900 home.
If you put less money down, your mortgage lender will typically require you to get private mortgage insurance (PMI) on the loan. That can save you money upfront but increase your monthly mortgage payment and total interest costs over the life of the loan.
However, if you can't afford to put that much down at closing, or want to hold onto more of your cash to cover other home-buying expenses, some government-backed loans have lower down payment mortgage options.
Use our Rhode Island down payment calculator to estimate how much you'll need for a down payment. Note that these amounts are just estimates. Check with your lender to determine how much you need to put down based on your credit score, lender requirements, and desired loan amount.
Rhode Island down payment assistance programs
If you're having trouble affording a home on your own, there are several down payment assistance (DPA) programs available to first-time and low-income buyers throughout the state of Rhode Island. These programs provide eligible homebuyers with a grant or second mortgage to help cover closing costs or a down payment.
Here are a few DPA resources in Rhode Island that you might be eligible for:
RI Housing Extra Assistance
This program offers homeowners a 15 year loan loan up to 6% of the purchase price, or $20,000, whichever is lower. The interest rate on an Extra Assistance loan will be the same as the interest rate on your RIHousing first mortgage.
Read more about the RI Housing Extra Assistance program on its official website.
FirstGenHomeRI
This program offers first time home buyers a $25,000 interest free forgivable loan that can be applied to down payments or closing costs.
Read more about the FirstGenHomeRI program on its official website.
U.S. Department of Housing and Urban Development
HUD has a list of additional Rhode Island homebuyer programs on its website.
More about down payment loans
Government-backed loans, like Federal Housing Administration (FHA) loans, allow a minimum down payment of 3.5% toward your home's purchase. To be eligible for a 3.5% FHA loan, you need a minimum credit score of 580.
Most conventional loans require a 20% down payment and a minimum credit score of 620. Some conventional loans allow for down payments as low as 3%, though the minimum varies by lender.
But making a down payment of less than 20% comes with some risks:
#1: Because you're borrowing more money, you'll have higher monthly payments and pay more in interest over the life of your loan.
Here's a breakdown of how much you'd pay over the lifetime of a loan if you put down 5% vs. 20%. This example assumes a 30-year loan on a Rhode Island home with the median sale price of $522,800:
| Down payment | Monthly mortgage payment | Total interest | Total cost |
| $26,140 (5%) | $3,003 | $584,535 | $1,107,335 |
| $104,560 (20%) | $2,529 | $492,240 | $1,015,040 |
#2: Putting less than 20% down means you'll pay additional PMI, which protects the lender from potential losses.
Mortgage insurance costs around 1% of your annual mortgage balance and is added to your mortgage payment each month. However, rates vary based on your down payment, credit score, and loan type:
- Conventional loans require PMI until you've built up 20% equity in the home (for example, until you owe $360,000 on a $450,000 home). Some lenders require proof that your home has increased in value enough to cancel the PMI.
- FHA loans require a mortgage insurance premium (MIP) for the life of your loans, regardless of your home equity.
- VA loans don't charge mortgage insurance. Instead, you'll pay a one-time VA loan funding fee at closing, which can range from 1.4% to 3.6% of the purchase price. VA loans are available only to veterans, active service members, and eligible surviving spouses.
Step 2: Find a great real estate agent in Rhode Island
Whether you're actively house hunting or just starting to browse homes on Zillow, it's never too early to find a great Rhode Island realtor to guide you in your search. An experienced agent can help you navigate a tricky local market, explore your financial options, and negotiate the best deal possible when buying a house.
In addition to finding and showing you properties, your real estate agent will help you make offers, negotiate contracts, and navigate the closing process. Plus, they can recommend other service providers (like title companies and inspectors) to help you buy your house in Rhode Island — just remember you can always shop around!
How does the NAR lawsuit impact buyer’s agent commission?
With changes in August 2024 from the lawsuit against the National Association of Realtors, buyers now need to negotiate the cost of hiring a realtor directly with their real estate agent. While it's still likely that the seller of the home you buy will offer a concession to cover your agent, it isn't a guarantee. We recommend interviewing multiple buyer’s agents to compare their rates and service and to find one you feel comfortable with.
When choosing the right realtor, consider their local knowledge and proximity to the specific neighborhoods you're interested in. You can start your search by looking up a brokerage or realty, but don't stop there. Take the time to research and interview multiple real estate agents, paying attention to their:
- Years of experience (the median is 8 years)
- Number of home buyers helped in the last year — the more the better!
- Expertise in your target neighborhood and price range
- Online reviews and complaints
- Licensing and certifications, such as an Accredited Buyer's Representative
- Membership in local real estate boards, such as the Greater Providence Board of REALTORS®[5]
Find top local agents through Clever, qualify for cash back after closing! Clever's matching service is 100% free to use with no obligation. View agents in your area now.
Step 3: Get pre-approved for a mortgage
Mortgage pre-approval is a lender's conditional offer to lend you a maximum amount of money to buy a home.
Most sellers in Rhode Island will ask for a mortgage pre-approval letter before showing you their home. It demonstrates that you're financially qualified to make an offer and can give you an advantage over buyers who don't have one.
Pre-approval can be as simple as a 40-minute phone call with your lender or mortgage broker, a credit check, and sending them your proof of funds. Once you make an offer on a house in Rhode Island, you'll start the initial mortgage application.
Does Rhode Island have a first-time home buyer program?
Yes! It’s called the RIHousing First-time Homebuyer Loan program.
Our First-time Homebuyer Loan helps buyers realize their dream of homeownership. Combined with down payment assistance, this loan allows you to finance 100% of the purchase price of your home, up to $736,000.
What’s the difference between pre-approval and pre-qualification?
Pre-approval is a more in-depth analysis of your finances than pre-qualification and serves as a more formal commitment from a lender. It usually requires a hard credit check and supporting documentation, such as paycheck stubs and W-2s. A hard credit inquiry may reduce your credit score by up to 5 points — that’s a minimal effect.
✍️ Tip: If you get pre-approved with multiple lenders within a 45-day window, it will only count as one credit inquiry, minimizing the impact on your score
Pre-qualification gives you a basic idea of what you might be able to borrow based on a quick look at your finances.
What do mortgage lenders review?
To figure out if they can pre-approve you for a mortgage loan, mortgage companies usually check the following:
- Credit report
- Credit score
- Payment history
- Monthly income
- Debt-to-income ratio
- Employment
(Note: These are the same factors that determine the loan's interest rate.)
You're evaluating lenders, too.
Consider each lender's quoted mortgage interest rate, estimated closing costs and fees, reputation and online reviews, customer service quality, and responsiveness to your questions. Compare interest rates and pre-approval amounts from several lenders to make sure you're getting the best rate and terms when you buy your Rhode Island home.
A local lender:
- Might provide you with more local market information, such as typical home values in your desired area
- Likely has a better understanding of lending regulations in Rhode Island
- Can connect with you other real estate professionals (realtors, contractors, inspectors, etc.)]
You don't necessarily need to use a state-based lender when buying a house in Rhode Island. Many national and online lenders are licensed to provide mortgage loans in Rhode Island and may provide better rates and terms.
Step 4: Choose the right location
Start zooming in on the best neighborhoods where home prices fall within your budget, and consider what you want out of your home.
If home equity is most important to you, search where home values are rising the most. But don't forget about local culture and amenities that fit your lifestyle.
Rhode Island home prices
🔎 At a glance: Home prices in Rhode Island
- 🏠 Median home value: $469,927 — projected to rise by 2.90% in the next year[3]
- 💵 Median listing price: $575,000 — down 2.54% compared to last month[1]
- 💰 Median sale price: $522,800 — up 2.21% compared to last month[4]
Keep in mind that prices can vary dramatically from city to city and even from neighborhood to neighborhood. Talk with your real estate agent to determine how pricing varies by location. Also, look at past home value trends to determine how much of your home value could go up (or down) in the next few years, depending on your location.
Lifestyle
When you’re looking at different home prices and value appreciation, don’t forget to look at how the location will affect your quality of life. Here are some of the things to consider when looking for the right home location:
- 🛍️ Amenities: Look for nearby parks, libraries, shopping centers, restaurants, and entertainment venues.
- 🚗 Commute time: Calculate travel time to work, considering traffic patterns and public transit options.
- 🚨 Crime rate: Investigate local crime statistics to ensure you feel safe in your new neighborhood.
- 🌱 Future development: Research planned construction or zoning changes that could affect the area.
- 🌳 Green spaces: Consider access to parks, hiking trails, or other outdoor recreational areas.
- 🏥 Healthcare access: Check the distance to hospitals, clinics, and other medical facilities.
- 🌊 Natural disaster risks: Consider potential environmental hazards like floods, earthquakes, or wildfires.
- 🏫 School quality: If you have children or plan to, research local school districts and their ratings.
While a prime location often comes with a higher price tag, it may offer long-term benefits in terms of appreciation and daily satisfaction. Your real estate agent can help you balance your budget and personal preferences to find the right location for you.
📍 Where should I buy a house in Rhode Island? Start here.
Step 5: Start house hunting in Rhode Island
Searching for homes in Rhode Island is the fun part of the home-buying process! You'll get to look at a variety of available listings and discover what you really want in a home.
But before you start actively house hunting, it helps to determine when the best time is to buy a house in Rhode Island, based on your priorities — price, housing inventory, and mortgage rates.
💵 The best time to buy a house in Rhode Island for price
According to historical data, you might have the best luck buying your Rhode Island house in January to get the best price on your new home.
Last year in January, the average listing price for housing in Rhode Island was $816,704, which is $148,868 than the median listing price.
However, in July, houses in Rhode Island had the average listing price of $1,050,556, making July the worst month to buy a house for a low price.[1]
🏘️ The best time to buy a house in Rhode Island for housing inventory
According to historical data, you may find the most housing units on the market in October, which would give you the most options to choose from.
Last year in October, 2,594 housing units were active on the market.
However, the state’s inventory reached a low in March with only 2,096 units, which was 19.2% less than the inventory in October.[1]
📉 The best time to buy a house in Rhode Island for lower mortgage rates
According to historical data, you may be able to get a low mortgage rate if you buy your house in September.
In September, national mortgage rates were the lowest at 6.08%.
However in October, national mortgage rates were the highest at 7.80%.
Currently, the national mortgage rate is 6.08%.[2]
As you’re house hunting, consider the full costs of owning a home, not just the monthly mortgage payments. Other potential costs of owning the home include maintenance and repairs, property taxes, homeowner's insurance, and HOA fees. Your realtor can help you understand which of your needs and wants fit your budget and favorite neighborhoods and adjust where possible.
Once you have a good idea of what you’re looking for, your agent will search for homes on your local Multiple Listing Service (MLS), bring you top picks, and schedule viewings and tours.
Step 6: Make an offer
Once you find a house in Rhode Island that you love, it's time to make an offer. Your real estate agent will help you write a compelling offer that will give you the best shot at convincing the homeowner to sell.
Talk to your real estate agent to work out all your contingencies and concessions so you can act quickly and make a strong offer that gives you a good chance of winning the home.
Part of your offer could include an earnest money deposit, which may be 1–2% of the purchase price. It's an incentive for the sellers to take the home off the market until closing. If the sale goes through, the earnest money goes toward your down payment, so you won't be anything additional out of pocket.
The speed of your offer often depends on how fast the housing market is moving and how many houses are currently on the market.
When houses are on the market for a short amount of time, it typically indicates that demand is high and houses are selling fast. Last year in June, Rhode Island houses stayed on the market for an average of 43 days — the least amount of days.
When houses sit on the market for a while, demand may be lower, and you could have more time to make an offer. Last year in January, Rhode Island houses stayed on the market for an average of 75 days.
Step 7: Inspections, appraisals, and financing
Once the seller accepts your initial offer, you must do due diligence before officially purchasing the home. Buyers order inspections to evaluate the home's condition fully, and lenders use appraisals to determine value and decide the final loan amount.
If something unexpected pops up or if the home's appraisal comes in below the purchase price, you could have an opportunity to renegotiate the terms of your contract.
Underwriting
In the underwriting period, your lender will verify that you can afford your mortgage. They may ask for proof of income, pay stubs, letters of explanation for income that doesn't come from wages, and other loan statements (like for student debt).
Delays could lead to a postponed closing, so start collecting this information early so that you’re ready to submit documents when your lender asks.
Inspections in Rhode Island
Having your house in Rhode Island inspected by a licensed inspector gives you peace of mind about the condition of the property before you commit thousands of dollars to purchase it. A licensed professional checks the house for any unseen, unexpected, or potential issues.
Your inspector should check out the following parts of the property:
- Roof
- Foundation
- Electrical system
- HVAC system
- Plumbing
A home inspection costs between $269 and $350, depending on factors like the home's location, condition, and age.
If the home has a septic system, you should also pay for a septic inspection to make sure it doesn't have any problems that wouldn't be covered in a typical home inspection.
🔦 Rhode Island-specific inspections
Rhode Island law requires sellers to inform buyers of all known issues with a property, but some problems can go undetected. To protect yourself from expensive repairs in the future, it's highly recommended to perform a few additional tests after the general home inspection to uncover all potential hazards.
Here are a few tests that you should consider doing before closing on a home:
- Radon testing: It's generally recommended to test homes regularly for elevated radon levels, so consider doing a test if the seller hasn't performed one within the past year. You can typically order a free or discounted radon test kit from the state government, or your inspector will perform a radon inspection.
- Pest inspection: Pest inspections aren't required, but having one done now can save you from serious infestations and structural damage later. Termites and other pests can invade a home and go undetected by residents until they cause extensive damage. Get a thorough check from a professional to put your mind at ease.
Appraisals
Appraisals determine the value of the property. If you're using a mortgage to buy your new house in Rhode Island, your lender will order an appraisal to make sure the home is worth the money that it's loaning you.
❓ What happens if the appraisal comes back low?
If a home appraisal comes back lower than expected, then you have several options to consider.
- You can attempt to renegotiate the purchase price with the seller, potentially using the appraisal as leverage.
- If possible, you can increase the down payment amount to make up the difference between the appraised value and the agreed-upon price.
- You can request a second appraisal if there are concerns about the accuracy of the first one.
- You can walk away from the deal if your purchase contract includes an appraisal contingency.
Ultimately, the best course of action depends on your financial situation, the local real estate market, and how much you want the property.
Step 8: Close on your new home!
Final walk-through
Before you close on your new home, you and your real estate agent will do a final walk-through of the property to ensure that it's still in the expected condition. You'll want to check to make sure:
- The appliances are in working order.
- Any agreed-upon repairs were handled by the seller.
- There was no damage to the home when the seller moved out.
Closing day
On the closing date, you’ll meet at the title company to review lots of important paperwork. You'll need to read and sign several documents, including:
- The final loan application
- The deed transfer
- Various disclosures
Before signing anything, ask your agent or closing attorney about any questions you have to make sure you fully understand each document.
🏛️ Do I need a real estate attorney to buy a house in Rhode Island?
Rhode Island requires you to hire a real estate attorney to buy a home. Treat the process similarly to hiring an agent. Interview multiple attorneys and proceed with the one that best meets your needs.
After completing the paperwork, you'll have to pay for closing costs. The title company will collect the total amount you owe for various services and pay each party on your behalf.
Typically, a buyer's closing costs can be separated into five categories:
- Buyer agent fees: According to the NAR lawsuit settlement of August 2024, buyers are now responsible for negotiating buyer's agent commission rates with their agent. If the seller hasn't agreed to pay the buyer's agent fee as a concession, you'll likely be on the hook for covering the fee.
- Prepaid costs: Ongoing costs of homeownership, such as property taxes and homeowners insurance. Mortgage lenders often require buyers to pay these monthly fees upfront.
- Title and escrow charges: Charges for the title company's services, such as title searches and title insurance.
- Lender fees: Fees for the mortgage company to originate and underwrite your loan. Lender fees might include other expenses associated with your loan, such as appraisal fees or mortgage points.
- Other closing costs: Miscellaneous costs unique to each buyer. Other closing costs can include pest inspection fees, natural disaster certification fees, and other variable expenses.
Buyers in Rhode Island typically pay 3%-5% of the purchase price in buyer closing costs. For a $522,800 home — the median sale price in Rhode Island — that's between $15,684 and $26,140.
After signing all of the paperwork, you'll get the keys and can move into your new house in Rhode Island. Congrats!
If you took out a mortgage to purchase the home, your first monthly payment is likely due within a month after closing.
Ask your lender for more specific details about the monthly payment schedule, how to make the first payment, and how to set up automatic payments (if desired).
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Data sources
To create this home-buying guide, our team gathered historical housing data from Realtor.com, Redfin, and Zillow, mortgage rate data from Freddie Mac, and home loan information from multiple government websites. As our primary sources update, we refresh the data in our series accordingly. As always, we recommend consulting with a real estate agent to learn more about local housing data and developments within your market.
About Clever Real Estate
Clever strives to provide our readers with the most up-to-date, accurate, and useful information. We’ve earned buyers’ trust with a 5-out-of-5-star rating on Trustpilot and over 3,000 customer reviews.
Our team of industry-leading researchers is committed to making homeownership more accessible by educating buyers through guides like this one. We've spent thousands of hours analyzing publicly available data, surveying consumers, and interviewing industry experts. Our research has been featured in The New York Times, Business Insider, Inman, HousingWire, and many more.
