Homes Got More Affordable in Philly Last Quarter
House prices in the Philadelphia market continued to climb in the third quarter of 2016, which is good news for homeowners wishing to sell. But there was good news for buyers too, according to mortgage site HSH.com: a 1.16-basis-point drop in mortgage rates made home loans much cheaper, offsetting the price rise.
As a result, according to HSH.com’s latest survey of incomes needed to buy a home in the nation’s 27 largest metropolitan areas, the salary required to buy a median-priced home in Philadelphia fell from its second-quarter level by a whopping $314, to $53,108. (All figures rounded to the nearest dollar.)
The change was not so great to move the area back up past Houston on the national affordability rankings; Philly remains the 13th most affordable large metro in the nation and the most affordable in the Northeast by a comfortable margin. But the salary gap between it and Northeast runner-up Baltimore closed, as home buyers in that city now need $902 less in annual salary to afford a median-priced home.
The median home price climbed from $232,200 in the second quarter of 2016 to $234,800 in the third, a rise of 1.12 percent from quarter to quarter. The change from last year, however, was a much smaller 0.04 percent — one of the smallest annual increases on HSH’s survey.
Assuming a 30-year fixed mortgage rate of 3.57 percent and a 20 percent down payment, a median-priced home buyer would spend $1,239 a month on the principal, interest, taxes and insurance on their mortgage, a drop of $7 a month from the previous quarter.
Cut the down payment in half and the income required rises to $60,986.
The figures above are based on median price data from the National Association of Realtors and HSH’s own interest-rate averages for 30-year, fixed-rate mortgages. They assume the buyer would be spending 28 percent of annual income on mortgage payments.
Pittsburgh remained the most affordable of the 27 metros on the HSH third quarter survey, while San Francisco remained the least affordable.