Affordability Challenges and Barriers to Homeownership in Philadelphia

Philadelphia has long been seen as a relatively affordable place to buy a home, but that perception is rapidly changing for many families as rising costs and structural barriers push the dream of homeownership further out of reach. While many cities saw homeownership increase during the pandemic, Philadelphia missed this trend entirely - highlighting how economic pressures and systemic challenges are making it increasingly difficult for residents to achieve the stability and wealth-building opportunities that come with owning a home.

This brief examines Philadelphia's housing trends from 2005 to 2024, identifying three key patterns through the analysis of sales data, mortgage records, and demographic statistics.

Among the findings:

• Philadelphia's homeownership rate fell from 57.5 percent to 52.4 percent between 2005 and 2023, outpacing national trends and similar cities. Based on the 2019-2023 American Community Survey, Black homeownership is at 47.4 percent, while White households are at 57.4 percent.
• Housing affordability has declined significantly, with median homeownership costs more than doubling from 2014 to 2024. Currently, fewer than 40 percent of homes are considered affordable to median-income households, down from over 60 percent in 2013-2015.
• High debt-to-income (DTI) ratios have been the primary reason for mortgage denials, and even approved loans are increasingly burdened with higher DTI ratios in recent years.
• The affordability challenges impact communities differently. White households can afford 60 percent of home sales, while only 25 percent are affordable for Black households and 32 percent for Hispanic households.

This report provides crucial insights for housing practitioners and policymakers who work to create and preserve affordable homeownership.