By Sam Brannan, Trulia
There’s a lot to contemplate before choosing to buy or rent over a long-term period. After considering your lifestyle, finances and long-term goals, the decision might not be as clear cut when you understand the vast amount of savings of buying versus renting in Philadelphia.
Aside from financial reasons, it makes sense for those with a busy and transient routine to prefer renting because of easy maintenance and less responsibilities. For those with young children, or those who want a personalized home, buying seems to be the popular choice.
The good news is that the City of Brotherly Love is one of the most affordable East Coast markets for both renting and buying. With a median home value of $134,208 and a median rent of $1,200, the two options are reasonable. Many residents do opt for renting in Philly, however, 57 percent of Philadelphia’s residents are home owners, which is high for a metro with 1.5 million residents.
In the current Philadelphia real estate market, the advised long-term decision from a financial perspective is to buy. For all households that can afford to put 20 percent down, are in the 15 percent tax bracket, and plan to stay put for 15 years, Philadelphia is 49.1 percent cheaper on average according to Trulia’s most recent rent or buy report.
At a national level, buying is somewhat cheaper than renting compared to last year. For all households who move every seven years and can afford to put 20 percent down, it’s 34.8 percent cheaper to buy – improving from 34.2 percent last year. When looking at the top ten list of “where buying a home beats renting” metros, eight of the 10 metros offer the largest financial advantage of homeownership are in the south, with Philadelphia and Detroit being the only non-Southern market to make the list.
Where Buying a Home Beats Renting
|U.S. Metro||Median Home Value, Mar 2016||Median Rent, Mar 2016||% Cheaper to Buy a Home Than Rent, Mar 2016|
|New Orleans, LA||$168,870||$1,450||-52.3%|
|Baton Rouge, LA||$159,362||$1,350||-51.3%|
|Fort Lauderdale, FL||$208,049||$1,750||-49.7%|
|West Palm Beach, FL||$228,703||$1,850||-48.1%|
When it’s all said and done, renting and buying are affordable in Philly. Over a long period of time, however, monthly rent begins to add up and always has the possibility of increasing. With a mortgage, your monthly payment will stay the same, and you’ll be eligible for large tax break as a live-in homeowner. Even if you’re a busy person and enjoy the benefits of renting, buying is worth a look if you want to save in the long-run.