The materials available in this article are for informational purposes only and not for the purpose of providing legal advice. You should contact your own advisors with questions regarding the Philadelphia Housing Market content herein. The opinions expressed in this article are the opinions of the individual authors and may not reflect the opinions of MeridianLink, Inc.
The City of Brotherly Love’s robust residential real estate market presents a prime opportunity for financial institutions to demonstrate their commitment to homebuyers while driving lending growth. With rising affordability, a thriving housing market, and a favorable price-to-rent ratio, Philadelphia stands out as an ideal location for mortgage professionals looking to expand their portfolios.
Let’s dive into a few of the reasons why:
1. Homeownership in Philadelphia Is a Financially Smart Move
Philadelphia ranks 13th among U.S. cities for the lowest price-to-rent ratio, meaning buying a home is often more cost-effective than renting. Moreover, the city has the 11th lowest home price-to-income ratio, making it one of the most accessible housing markets in the country. These factors create a strong incentive for renters to transition to homeownership, fueling mortgage demand.
2. The Buying Power in Philadelphia Is Stronger Than Ever
In a time when affordability is a concern in many metro areas, homebuyers in Philadelphia have a distinct advantage. Those purchasing a home in the region currently enjoy $135,000 more buying power than the existing home price. This creates a compelling opportunity for lenders to offer tailored mortgage solutions that help homebuyers maximize their purchasing potential.
3. Mortgage Payments Are Lower Than Rent
One of the most striking aspects of the Philadelphia housing market is its cost advantage for homeowners. The typical monthly mortgage payment is $24 less than the average rental payment, making homeownership an increasingly attractive option. While the savings margin isn’t as large as in other cities, even a small reduction in monthly costs can be a deciding factor for buyers considering a mortgage.
4. Philadelphia’s Affordability Supports Sustainable Lending Growth
With 51% of home listings in the city considered affordable, lenders have a prime opportunity to work with a broad range of borrowers, from first-time homebuyers to those looking to upgrade. Additionally, per capita income in Philadelphia accounts for just 20.7% of principal and interest (P&I) benchmarks, reinforcing that homeownership remains financially sustainable for a large portion of the population.
Final Takeaway
For mortgage professionals at banks, credit unions, and independent mortgage banks (IMBs), Philadelphia offers a thriving market with affordability, a strong price-to-rent advantage, and expanding housing options. Whether you’re focused on first-time homebuyers, refinancing, or expanding your loan portfolio, Philly provides ample opportunities to support homeownership while growing your business.
Now is the time to position your financial institution as the go-to mortgage lender in one of the nation’s most promising residential real estate markets; however, even in a strong market, outdated legacy mortgage technology can hold your team back.
Are inefficiencies preventing your mortgage operation from meeting the moment? With features including customizable workflow automation, a built-in automated underwriting tool, and so much more, the 100% browser-based MeridianLink® Mortgage offers lenders the digital experiences and efficiencies they need to tap into their full potential.
Discover how upgrading your mortgage tech can help you capture the growing opportunities in Philadelphia’s housing market.
