How Much House Can I Afford in Philadelphia?
Buying a home in Philadelphia is an exciting milestone—but before you start touring neighborhoods or scrolling through listings, one of the first questions to answer is: How much house can I really afford?
Key Factors That Determine Affordability
- Your Income Lenders typically follow the 28/36 rule: no more than 28% of your gross monthly income should go toward housing expenses, and no more than 36% should cover total debt (including car loans, credit cards, and student loans).
- Your Debt-to-Income Ratio (DTI) Your DTI is a major factor in qualifying for a A lower ratio signals to lenders that you can comfortably manage your monthly payments.
- Your Down Payment A higher down payment can lower your monthly mortgage costs and reduce the need for private mortgage insurance (PMI). Philadelphia buyers often put between 3% and 20% down, depending on the loan program.
- Credit Score Higher credit scores may qualify you for better rates, lowering your monthly payment and increasing the home price you can afford.
- Interest Rates Even a small change in interest rates can significantly impact your monthly Keeping an eye on today’s mortgage rates helps you set a realistic budget.
- Property Taxes & Insurance in Philadelphia Don’t forget to factor in local property taxes and homeowner’s In Philadelphia, property taxes vary by neighborhood, so these costs can influence your affordability range.
Example: Philadelphia Home Affordability – Annual Income: $105,400 – Down Payment: 10% – Monthly Debts: $500 – Interest Rate: 6.5%
Estimated Home Price Range: $280,000 – $340,000 (This is just an estimate—your numbers may look different.)
Current Market Trends in Philadelphia
Median Prices
Philadelphia’s median home prices hover between $210,000 and $275,000 depending on source. Zillow lists values near $256,000–$276,000, while Drexel reports $210,000. Redfin lists the July 2025 median sale price at $275,000.
Price Growth
Growth is slowing compared to the post-pandemic surge. Drexel notes a +2.1% year-over-year increase in Q1 2025, while Zillow records a +3.0% increase. Metro-level data shows prices closer to $359,000, up 6.5% year-over-year.
Sales Volume & Days on Market
Around 3,724 homes sold in Q1 2025—down from the COVID-era peak but near the historical average. In July 2025, 1,290 homes sold, down 5.8% year-over-year. Properties now spend an average of 47 days on the market compared to 41 last year.
Cash Buyers
Cash purchases have declined to 33% in 2024 from 37.6% in 2023, suggesting a cooling in investor-driven purchases.
Affordability Pressure
Buyers now need an estimated $105,400 annual income to afford a typical Philadelphia metro home—about $31,000 more than renters. With median sale prices nearing $359,000, affordability remains one of the top challenges for local buyers.
Knowing your budget up front makes your home search smoother and more confident. Every borrower’s situation is unique, and I’d be happy to walk through your specific numbers and compare them to today’s market trends.
Contact J.R. Conway at CM Mortgage Services, Inc. to get started with a personalized pre-approval today.
