Rent vs buy in Pennsylvania
Over 7 years at today's numbers, 5 of the 8 cities of 50,000+ favor renting, 2 favor buying, and 1 is a toss-up.
Renting or buying in Pennsylvania's cities
| City | Verdict | 7-year result | Break-even (up to 30 yrs) | Typical home | Rent /mo |
|---|---|---|---|---|---|
| Philadelphia | Buy | buying wins by $40k | year 3 | $231,584 | $1,757 |
| Allentown | Rent | renting wins by $33k | year 17 | $315,694 | $1,686 |
| Erie | Rent | renting wins by $27k | year 24 | $204,067 | $1,098 |
Sources: Zillow Home Value and Observed Rent indexes. Our rent vs buy method produces the verdicts, at 20% down over 7 years.
Our take on Pennsylvania
Buying pays off in Pennsylvania's 2 biggest cities. A typical home in Philadelphia costs $231,584, while renting runs $1,757 a month. Over 7 years, buying leaves you ahead by $40k, and you break even in year 3. Pittsburgh works out much the same way. In that city, buying costs $234,620 and renting $1,569, so buying comes out $21k ahead and breaks even in year 5.
Renting beats buying in 5 cities outside those 2 hubs, and Scranton ends up a toss-up, only $2k apart. Homes in Allentown go for $315,694, and rent is $1,686. Renting there saves you $33k over 7 years; buying doesn't reach break-even until year 17. Low home prices don't help you when rent is lower still. In Erie, rent of $1,098 against a $204,067 home leaves you $27k better off as a renter, with break-even in year 24.
Statewide costs push your budget 2 ways. The property tax is 1.30% on the state's $287k typical home, above the 0.94% US rate. Cheaper homeowners insurance gives you a hand, at $1,021 a year compared with $1,308 nationally. Long term, prices have grown 4.1% a year, and over the last 10 years they've grown 6.2% a year. Only 31% of households rent here, compared with 35% nationally, and the median rent of $1,209 a month sits below $1,413 seen across the US.
Buy if you stay at least 5 years in either Philadelphia or Pittsburgh. For smaller cities we choose renting, so the money you save each month is yours to keep.