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Why Buying a House in Philly Makes More Sense than Renting

You'd need a huge raise to be able to afford renting

A new report confirms what Philly residents have known for quite some time now: Owning a home is much for affordable than renting in this city.

Zillow's latest report, "The U.S. Housing Affordability Crisis: How a Rent and Low-Income Problem is Becoming Everyone's Problem," reveals that in Philadelphia, renters spend 29 percent of their income paying their landlords. That's about double the percentage amount that homeowners spend on their mortgages—14 percent.

The report also found that Philly has one of the largest gaps between the most affordable and least affordable communities. Specifically, the spread is 21.8 percent between income spent on rent in the most affordable community to income spent in the least affordable neighborhood. That means Philly has the fifth widest spread in the country, after Miami, New York, Los Angeles, and San Francisco.

It's the same situation across the country. As rent continues to steadily rise yet incomes remain stagnant, it would take a "huge pay raise" for workers to get the share income spent on rent back to historic levels, the report notes.

Here's what that means for Philly, where the current median income is $64,046. Renters would have to actually earn $87,511 a year in order to be able to truly afford renting in this city. In other words, you'd have to argue for a 36 percent raise.

You can read the complete report over at Zillow.