There’s finally some encouraging news for homebuyers in Philadelphia and Southern New Jersey who’ve been feeling priced out or stuck on the sidelines.
Affordability is beginning to improve — and while it’s not a dramatic shift overnight, the momentum is moving in the right direction across the Philadelphia housing market and many South Jersey real estate markets.
Affordability Is Improving in Philadelphia and South Jersey
One of the best ways to measure housing affordability is by looking at how much of a household’s income goes toward homeownership costs.
According to Zillow, housing is typically considered affordable when it takes 30% or less of your monthly income to cover your mortgage, property taxes, homeowners insurance, and maintenance.
Over the past few years, buyers in Philadelphia County, Bucks County, Montgomery County, Delaware County, and throughout Camden County, Gloucester County, and Burlington County saw affordability stretched thin as home prices and mortgage rates climbed.
Now, that pressure is starting to ease.
While we’re not fully back to ideal affordability levels, the percentage of income needed to purchase a home is slowly declining — giving buyers in the Greater Philadelphia area and Southern New Jersey suburbs more breathing room than they had even a year ago.
(see graph below):
Why the Philadelphia & South Jersey Market Is Shifting
Several trends are helping local buyers regain buying power:
1. Mortgage Rates Have Stabilized
Mortgage rates have come down from recent highs, helping reduce monthly payments for buyers across Philadelphia PA and South Jersey communities like Cherry Hill, Washington Township, and Moorestown.
(see graph below):
2. Home Price Growth Has Moderated
Home values in the Philadelphia metro area and South Jersey real estate market are still holding strong, but the rapid price spikes of the past few years have cooled. That slower growth makes budgeting more predictable and reduces the intensity of bidding wars in many neighborhoods.
3. Wage Growth Is Helping Buyers
As incomes rise and price growth slows, affordability improves — even if rates don’t drop dramatically. This is especially important for first-time homebuyers in Philadelphia and move-up buyers relocating within South Jersey.
Where Affordability Is Improving First
Certain neighborhoods in Northeast Philadelphia, South Philadelphia, and parts of Camden and Gloucester County are already seeing better affordability compared to peak market conditions.
(see graph below):
That doesn’t mean every area is equally affordable — highly desirable suburbs and walkable city neighborhoods remain competitive — but buyers have more negotiating power and more inventory to choose from than they’ve had in recent years.
Bottom Line for Philadelphia & South Jersey Buyers
The Philadelphia and Southern New Jersey housing markets are finally seeing affordability trends move in a healthier direction.
It’s not a “buyer’s market” overnight — but conditions are improving. And because real estate is hyper-local, what’s happening in Center City may look very different from what’s happening in Haddonfield or Marlton.
If you’re wondering how these affordability trends impact your buying power in Philadelphia or South Jersey, now is the time to take a closer look at your options.