For Philly residents, the answer to the popular question, “Should I buy or rent?” has always been easy: Buy. This has long been a homeowner’s city—52.6 percent of Philadelphians are owners—and the most recent numbers reveal that buying is still the better end of the deal.
But the gap is definitely narrowing.
That’s according to real estate website Trulia’s latest report, which found that cooling rent prices in Philly and beyond are making buying less attractive.
In Philly, the report found that based on spring real estate and rental market stats, it is 48.3 percent cheaper to buy a home than rent an apartment. That’s with the median home value at $148,712 and median rent at $1,275. It’s also assuming that owners hold onto their homes for seven years and can put 20 percent down on a 30-year, fixed-rate mortgage.
That 48.3 percent means that Philly is one of the few major U.S. cities where buying far outweighs renting.
However, consider how much has changed in the last year. The report says that number was nearly 10 percent higher in 2016, when it was 58 percent cheaper to buy than rent in Philly.
Trulia says that’s because, in addition to higher mortgage rates, median home values rose 8.1 percent year-over-year while median rents fell 8.9 percent year-over-year.
The report found the opposite in surrounding counties around Philadelphia. In Montgomery, Bucks, and Chester counties, it is 35.84 percent cheaper to buy—up from 28.3 percent in 2016.