First-time Philly homebuyers need to make more to buy a starter home
Home prices and mortgage rates continue to make affording a home a real challenge. New data from Redfin has revealed that starter homes in the Philadelphia area have become less affordable over the past year. First-time home buyers in the metro area need to earn at least $44,326 to buy a typical house, a 15% increase from 2023, but nearly $30,000 less than the metro’s median household income. The median sale price for a starter home in the area is now $135,000. Redfin economist Chen Zhao attributed overvalued home prices and high mortgage rates to the combination of these factors creating an inventory crisis. The average 30-year fixed mortgage rate is about 7%, double what many homeowners secured during the pandemic.
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New data show starter homes in the Philadelphia area have become less affordable over the past year.
According to real estate broker Redfin, first-time home buyers in the metro area need to earn at least $44,326 to buy a typical house. The threshold, based on market value estimates from February, is 15% higher than 2023 but nearly $30,000 less than the metro’s median household income.
The median sale price for a starter home in the metro area — a property priced in the bottom third — is now $135,000, according to the report. The metro covers Philadelphia and Delaware County.
Redfin economist Chen Zhao said overvalued home prices and high mortgage rates continue to squeeze first-time home buyers because the combination has also created an inventory crisis.
“So many homeowners locked in very low mortgage rates during the pandemic, and they’re very reluctant to give those up,” said Redfin economist Chen Zhao. “That means there’s very little supply and when there’s little supply … that means prices are going up.”
The average rate for a 30-year fixed mortgage is about 7% — about double what many homeowners secured during the pandemic.