How long do you need to live in Philly for buying to make sense?
Should you rent or buy a home in Philadelphia?
Right now the housing market is competitive — prices are rising and with fees and closing costs, it may not make sense to buy unless you’re staying put for several years.
To get an idea of just how long you have to stay in Philly for it to be worth your money to buy, you need to calculate the breakeven point. The point at which the total costs of renting become greater than the total costs of buying. A shorter time to break even means it’s a better place to buy soon.
So, if renting is better in the short-run and buying is better in the long run, when does the financial logic switch? When, in other words, do the long-run costs of renting begin to outweigh the upfront costs of buying? It could be three years, or seven or 15. The timing depends largely on where you live. Compared to other major cities Philly is a bargain. If you plan on staying at least 3 years definitely consider buying.
- Average monthly mortgage payment: $640
- Average monthly rent: $1,414
- Average home price: $157,802
- Breakeven year: 2.6