Philadelphia Ranked No. 3 on the List of Cities Where First Year of Homeownership is the Cheapest
A recent study analyzed the 20 largest cities in America to find out which ones are the most affordable during the first year of home ownership. This data comes from SmartAsset. They Specifically compared five categories across the 20 cities. Those include:
Down payment on the median valued home
Average closing costs
Monthly mortgage payment
Home values have gone up in many cities across the country and mortgage rates have recently spiked as well. That makes it especially difficult for first time homebuyers to afford homeownership. Luckily, if you live in the city of Philadelphia, it might be more feasible for you.
Across all cities, the costs during the first year of homeownership have significantly increased from last year to this year. On average, it increased by about 17% from $364,900 to $426,997. Keep in mind that’s the average across all cities, but it’s quite a big jump overall.
The average monthly mortgage payment is more than $1,000 in all 20 cities this year. Last year, the average was less than $1,000 in nearly half of the cities in the study.
Philadelphia is one of the more affordable cities on this list. They assumed a 20% down payment on the median valued home and a 30-year fixed rate mortgage at 6.0% to find these numbers. Using those numbers, Philadelphia has an average down payment of $46,612, closings costs of $8,404, yearly mortgage payments totaling $13,414, yearly homeowners insurance at $899, and yearly property taxes at $2,261.
Philly is the 3rd Most Affordable City in the U.S. for the First Year of Homeownership
The average first-year of homeownership cost in Philly came out to $71,590. According to SmartAsset, homebuyers will need $55,016 in cash to cover upfront costs, which includes average closings costs of $8,404 (that number is the second highest in this study).
Now those might seem like high numbers to some people, but let’s compare this to the other cities in this study.