Another factor weighing in on the residential housing market in Philadelphia is the slow but steady increase in mortgage rates. The current rate in most of the country is hovering around five percent, with future increases anticipated.
New home sales have fallen in many real estate markets across the United States to the lowest level in several years. Most of the major home builders are reporting lower sales.
Home prices in the United States have increased approximately five percent annually for the past several years. It now requires more time for people to save for a home down payment – in many cases years longer compared to a decade or two ago.
Although there was some price appreciation in Philadelphia home values in early 2018, the second and third quarters of 2018 recorded zero percent appreciation. Or stated another way, the median or average Philadelphia home is worth the same in late 2018 as it was in late 2017.
However, this period may be just a slowdown in the real estate market. Philadelphia still has low inventory levels of home for sale and pent-up demand. 2019 may turn out to be a continuation of the upward price appreciation of the city’s residential housing stock.