Want to Live in Greater Philadelphia? Reasons Why Buying Is Cheaper than Renting Despite the fact that numerous Philadelphia neighborhoods are growing, and with that growth comes apartment buildings designed for renters, buying a home is always going to be the more affordable option. Here is what you should know about buying a home in greater Philly. By the Numbers According to the most recent Rent vs. Buy report from Trulia, Philadelphia is ranked ninth in the list of US cities where it is cheaper to buy a home than to rent. This is true even though home prices are still quite high in the area after last year’s broken records. In fact, it’s 50.8% cheaper to buy a home in this area than it is to rent. The average cost of rent in Philly is $1300 a month, and the average home value is $141,176 according to Trulia, and they compiled this information in March 2016. An Unbroken Trend? Those involved with researching for Trulia claim that this trend should continue over the next several years, and this is due in part to the below-average interest rates for mortgage loans. It is not expected that home prices or interest rates will climb enough to outpace rent in Philadelphia for the next few years, which means that anyone considering coming to the area should consider buying as opposed to renting. Why Buying is Best If you’re going to live in the same place for at least seven years, and if you are able to pay a 20% down payment, you’ll save up to 50% on buying your home as opposed to renting in that same timeframe, even when things like closing costs, homeowner’s insurance, and property taxes are figured in. However, along those same lines, if you plan to move in fewer than seven years, whether or not buying is the best choice depends on many different factors. If you have a very low interest rate and your home is in a high-demand neighborhood, it may still be worth your while to buy, even if your cost of living increases slightly over renting. You may be able to recoup those funds when you sell. When to Worry Home prices continue to climb in Philadelphia, and this creates some concern among buyers. In fact, house prices are climbing at a faster rate than average rents, which could create problems in a few years’
time. Fortunately, many neighborhoods in Philadelphia are growing at exponential rates, which means new builds are likely in the works. As more supply becomes available to meet demand, this should force down housing prices and make purchasing a home anywhere in the city more affordable, even as rents continue to rise due to future cost of living increases. Philadelphia is only one of two cities in the Northeast where it is still significantly cheaper to buy a home than to rent. Experts agree that this trend will continue well into the future, especially as more homes are constructed and rent prices continue to climb.
Published on Nov 30, 2016
Despite the fact that numerous Philadelphia neighborhoods are growing, and with that growth comes apartment buildings designed for renters,...