Is Pennsylvania a Good State to Buy a Home?

Every state has its own pros and cons that make it a great place to live. Pennsylvania, an original American colony, has a lot of perks, like its beautiful scenery and excellent education system. But it’s not all groundhogs and Liberty Bells living or owning real estate in Pennsylvania.

We recommend looking at all the factors involved in buying a home in Pennsylvania. To help you, we pulled together the state’s cost of living, real estate market information, and other pros and cons that play a role in deciding to own a slice of the Keystone State.

What is the cost of living in Pennsylvania?

Living in Pennsylvania is surprisingly affordable! Costs of living for housing, health care, food, and utilities come to about 5% cheaper than the national average, according to Sperling’s Best Places Index. Though transportation and health care costs are higher here than elsewhere, you can still enjoy amazingly low averages on essential items like housing and groceries. This makes Pennsylvania ideal for those looking to save money without sacrificing quality life experiences!

MERIC also has PA at the 29th position for most cost-effective states, estimating residents pay $44,650 annually for essential expenses like housing, utilities, and food.

Now, Pennsylvania is a large state by land area. The population centers are spread out, and there’s vast natural space between the metropolitan areas. And with Philadelphia being so close to New Jersey and Washington DC, its market is in higher demand than other parts of the state, which translates to a higher cost of living. For comparison, here are the indexed cost of living for a few different cities in Pennsylvania.

How much do I need to make to afford Pennsylvania?

The cost of living is just one slice of the equation. If you are a working professional or retiree, you must know that your income stream can cover your expenses. According to MIT’s living wage calculator, a family of four with two children and one adult working would need to make $37.62 an hour. A typical family spent around $13,295 on their housing costs, $11,821 on transportation, and $13,429 on food. This family would need an after-tax income of $66,636.

For a single adult with no dependents, the required annual income after taxes is $29,244. This individual would spend around $9,684 in housing, $4,470 on transportation, and $4,559 on food.

Can you find work in Pennsylvania?

Despite ranking at number 27 in economic opportunity, Pennsylvania is thriving with plenty of work possibilities. It’s become a hub for tech startups blossoming in affordable cities like Pittsburgh. Over in Philadelphia, find big business: ten major US law firms operate there, plus other very visible and stable financial entities like the US Mint and a division of the Federal Reserve Bank.

The state has been associated with the steel industry over the decades. While manufacturing is still an essential part of the Pennsylvania economy, it’s not all that’s available in the state. It likes to call itself the “snack food capital of the world” because food processing is one of the state’s top industries. Over 2,000 companies specialize in food production and processing.

Pennsylvania also has robust communications, medical and technology sectors, distribution and logistics, and energy production.

Is Pennsylvania tax-friendly?

Looking at the big picture, Pennsylvania’s tax burden is the middle of the road. WalletHub ranked it no. 26 in 2023 for overall tax expenses.

Pennsylvania residents pay an individual state income tax on a flat rate of 3.07% in 2023. Among all the states that charge an income tax, this was the tenth lowest rate in 2021. Local municipalities may also charge an income tax. Social Security benefits are not taxed, but any income from estates or trusts can be subject to this tax.

For your sales taxes, the state rate is 6%, and counties can add an additional 2% sales tax levy. The statewide average sales tax rate was 6.34%, so it’s on the lower side when stacked against all the states. However, gas taxes were among the nation’s highest, with a $ 0.587-gallon charge.

Real estate taxes are managed by the local county. Using the average effective tax rate, which compares the percentage of taxes paid and housing value, Pennsylvania homeowners owed around 1.49% in 2023. On a $300,000 home, that’s $4,470 in property taxes.

What is Pennsylvania’s real estate market like?

Pennsylvania’s size delivers the full suite of real estate offerings. Buyers can live in a condo near a downtown core, restore a historic home, buy a suburban single-family home in a master-planned community, or homestead on their PA farm. Buy a lakefront home, live on a river, or head to the mountains for fantastic views.

Not only do residents have varied choices, but the statewide real estate market is on the affordable side. The Pennsylvania Association of Realtors reported the median home sale price in January 2023 was $195,123, a year-over-year increase of 2.5%. That price is significantly lower than the national median of $359K.

Overall, the 2023 year started with a seller’s market at 2.6 months of inventory. Like much of the nation, available listings and sales were trending downward at this time.

This big-picture overview will change as you zoom in on which area of the state you’d like to buy. The major cities have higher demand and, therefore, higher prices. Check out the median

list prices for different parts of the state in January 2023:

• Philadelphia: $264,900
• Pittsburg: $225,000
• Allentown: $239,300
• Lancaster: $285,000
• Harrisburg: $225,000
• Erie: $154,900

What are some key places to live in Pennsylvania?

Pennsylvania stretches some 300 miles east to the west and has diverse landscapes in between. These features lend the most popular areas some of their advantages.

The Philadelphia Metro on the Schuylkill and Delaware Rivers in southeast PA. The city played an important role in colonial America and the Revolution, but modern Philadelphia combines the edgy and traditional. It’s home to several top-20 universities and a funky art scene. It has affordable living compared to neighboring cities like New York and Washington, DC. US News and World ranked it the 19th best place to retire and the 99th best place to live in the US.

Dutch Country in the south-central part of Pennsylvania boasts a high concentration of Dutch Amish, descendants of German immigrants searching for religious freedom. But you don’t have to be a member of this group to live here. Inside this region are beautiful towns like Lancaster, whose rich history and culture are part of its charm.

Another option on the fringe of Dutch Country is the state capital Harrisburg, the state’s second-best city to live in. The metro parks along the Susquehanna River and its many annual festivals and events are some of the highlights of living here.

The Pittsburgh metro in southwest Pennsylvania has been a major steel industry hub since its beginnings. It ranks as the second most populous city in the state. The city is undergoing profound reinvention, transforming itself into a major tech and manufacturing hub, bringing in young talent, and updating its culture scene with craft breweries and entertainment venues. US News and World Report says it’s the best place to live in PA and the 26th best place to live in the nation.

And don’t overlook Reading, a town associated with the Monopoly board game. US News and World Report says this is the tenth Best Place to Retire in the nation, with a lot of that having to do with its incredible affordability mixed with a diverse economy and things to do. There are miles of pathways for walking and biking, and the Schuylkill River provides access to water recreation, like canoeing and kayaking.

If you prefer a smaller town, some places to check out would be York, Erie, and Scranton. These are highly rated towns with modern amenities like globally inspired dining, access to indoor and outdoor recreation, and a rich history. Plus, they’re all highly affordable places to live, thanks to housing markets under average.

What are some pros to living in Pennsylvania?

We could say a lot of different things about living in Pennsylvania. Besides its housing affordability, much of what makes it a great place to live is the culture and access to amenities.

If you want to live someplace that experiences all four seasons and has the amenities to match, Pennsylvania is the place to be. In the winter, the northern part of the state experiences lake-effect snow. So you can get outdoors to do sledding, ice fishing, snowshoeing, and other winter activities. The mountains are perfect for downhill and cross-country skiing. In the summer, it’s warm enough that you can hit the local lake or river to cool off by swimming, boating, and fishing. The fall leaves in the Alleghenies are gorgeous, as are the spring wildflowers that explode across the hillsides.

To go along with these changing seasons, Pennsylvania is proud of its outdoor abundance. There’s a whole region of the state called the Wilds! The number of things to do recreationally in Pennsylvania is incredible. Take your pick: hunting, mountain biking, rock climbing, white water rafting, long-distance backpacking trips, and more– you’ll never be bored. Even the cities have expansive green spaces and nature preserves for walking, road bicycling, and sports.

Not everyone likes the outdoors, and we get that. But don’t worry. Pennsylvania is bursting with art and cultural attractions. All the major cities have interactive children’s museums, major art centers, live music, and theater venues–name your entertainment, and you’ll find it. And the history here is almost unmatched. For anyone who loves learning about colonial America or the American Revolution, eastern Pennsylvania and Philadelphia is a must-visit destination. For dining, remember, this is the snack food capital of the world! You take a tour at Hershey’s or sample locally grown wines.

The state also has some iconic sports teams and a very supportive fan base. Whether you prefer the Phillies or the Steelers, you can cheer for a pro team in some sport all year round.

Pennsylvania has an incredible roster of top-ranked universities for those pursuing higher education. Philadelphia is the center for most of these. The University of Pennsylvania and its Wharton school of business often feature among the world’s best. Right on their heels is Carnegie Mellon University, Villanova University, the University of Pittsburgh, Temple University, and Drexel University.

What are the drawbacks to living in Pennsylvania?

It’s not all cheesesteaks in Pennsylvania. Some of those same things that others may like, like the four-season weather, may not be as appealing to you. As a northeastern state, the colder weather will last a little longer and be a little colder.

If you want to live in one of the big cities like Pittsburgh and Philadelphia, the traffic is another drawback. Rush-hour commutes can be especially congested. Most notable is Philadelphia, the second most congested city in the United States for 2022 and the fifth most in the world. The city is trying to improve its public transportation efficiency. It is working on a regional rail system, but get ready. If you’re passing through downtown during peak hours, the average drive speed was 12 miles an hour.

Safety can also be a concern depending on where you live in the state. Most of this is concentrated on Philadelphia, which has rates that consistently rank above the national average. In 2022, it had one of the highest increases in homicide rates. But, crime rates will vary, depending on where you live, so talking to a local real estate agent and researching can help steer your choices.

Should you buy in Pennsylvania?

In the end, that choice is really up to you. Everyone has different factors they look at to decide if a place is an excellent place to live. If you choose to live here, overall real estate is more affordable, although you may pay more taxes than you expect. The economy has some diversity, and there is so much to do for outdoor recreation.

And, with Pennsylvania’s size, you have so many choices for finding the right place to live. It may come down to your budget and using a local real estate agent to target the market and kind of home you want.