'Seller's market' still stymies Pennsylvania homeownership

HARRISBURG — Pennsylvania remains a seller’s market for real estate but 2025 saw signs of balance as housing inventory stabilized while demand cooled and the availability of listings stretched.

The median sales price for homes in the commonwealth rose to $299,500 last year, up 4.5% from the median of $286,712 in 2024, according to the Pennsylvania Association of Realtors.

More than 116,000 homes were sold last year in Pennsylvania, a 4.7% increase, according to PAR, and the average number of listings grew 15% in 2025.

“Absolutely, it is still a seller’s market,” said Mark Kibbe of the Pennsylvania Association of Realtors, noting that conditions vary depending on location and listing. “I think it is slowly returning to more of a balanced market, ever so slowly.”

Based on availability, Realtors consider a market to be balanced when housing stock has a 6-month shelf life. PAR data shows housing stock stuck above 4 months from May through November after beginning the year just below 3 months and ending the year just above that mark.

While listings, sales, median sales price and length of time on market all shrank month to month when comparing December to November, that tends to be the trend at both the start and end of any given year.

“Real estate markets are cyclical. The market will recover. It will turn back, eventually, into a balanced market. We’re seeing the signs of that happening. For a lot of people, it’s not happening fast enough,” Kibbe said.

It’s apparently not happening fast enough for first-time homebuyers.

The U.S. housing market experienced a record low in sales to first-timers, according to the National Association of Realtors. First-time homebuyers accounted for an all-time low of 21% of sales between July 2024 and June 2025, the national group found, while the median age for a first-time homebuyer climbed to 40 years — an all-time high. According to NAR, the share of first-time buyers shrunk by 50% since 2007.

“For generations, access to homeownership has been the primary way Americans build wealth and the cornerstone of the American Dream," Shannon McGahn, NAR executive vice president, said in November in a release announcing the findings. "Delayed or denied homeownership until age 40 instead of 30 can mean losing roughly $150,000 in equity on a typical starter home.”

Jim Brown, a real estate developer and past president of the Pennsylvania Builders Association, said affordability is making it exceedingly difficult for anyone to build new homes these days, particularly first-time homeowners.

He pointed to Johnstown in Cambria County, where, citing PBA data, Brown said the median cost to build new is $410,000. According to that same data, he said about 87% of Johnstown-area residents can’t afford it.

The rising price of materials, lack of labor, an excessively layered regulatory environment and the impact of federal tariffs and immigration policies are disrupting the built-new market, he said.

“I hate to say this as a builder, but there have been times when I meet with a family and I want to discourage them from building a new home,” Brown said.

“I would say it’s closing off. For many people, first-time homebuyers, the door’s slowly closing on them, unfortunately. There’s now a lot we can do. We pass our costs down to the buyers. We can’t eat that cost or we wouldn’t be in business. There’s always the remodel market, that’s where we pick up the slack,” Brown said.

Growing the housing stock in Pennsylvania and ensuring affordability are bipartisan aims of the Pennsylvania General Assembly, though proposed solutions vary.

A proposal to create savings accounts for first-time homebuyers easily cleared the state House last spring. The bill proposes the creation of tax-deductible accounts of up to $50,000 for individuals and $100,000 for couples across 10 years. The money can be used toward a down payment and closing costs for a single-family home. A companion bill was introduced in the state Senate.

Another proposal looks to create the Homebuyer Rebate Program for prospective first-time homebuyers, returning $2,500 to qualified purchasers from the realty transfer tax.

Each measure awaits further legislative action this session toward becoming law.

The Pennsylvania Housing Finance Agency is focused on affordable mortgage and rental options, including for low- and moderate-income families. Several competitive mortgage options are tailored for first-time homebuyers with low fees and opportunities to secure financing to buy a home and save on down payments and closing costs.

Robin Wiessmann, PHFA’s executive director and CEO, said the organization is coming off consecutive record years of originating loans and that its total portfolio has more than doubled in the past five years, approaching $8 billion.

According to PHFA, more than 6,700 families were financed in 2024 at a combined $1.15 billion. What had been the organization’s best year was exceeded in 2025 — nearly 6,900 families, $1.53 billion in lending.

Wiessmann noted how housing inflation slightly exceeded that for goods and services, and that the rising cost of energy and insurance are the latest barriers homebuyers must overcome.

“It’s well understood that it’s a national crisis, the need to have more available housing, not just affordable housing,” Wiessmann said.

Prospective borrowers are often in a position to afford the monthly mortgage payment, according to Coleen Baumert, PHFA’s director of homeownership. She said trouble begins with the up-front costs for a down payment and closing.

Baumert said the organization provides maximum financing between 95% to 97%. Of the remaining money owed, borrowers need just $1,000 of their own funding.

She spoke of the Keystone Forgivable in Ten Years program, a forgivable loan that Baumert described as the next best thing compared to grant funding. Five percent of the purchase price or appraised property value, whichever is less, is provided up front for closing and money down. The program is especially useful for those with lower credit scores, as low as 660 presently. Functioning as a second loan, it’s forgiven at a 10% rate annually and fully forgiven across 10 years. A homebuyer education course is required of recipients.

Up to an additional $30,000 can be borrowed through the K-FIT program to repair or renovate the home being mortgaged, too.

“It wouldn’t be a second mortgage,” she said of K-FIT borrowing specific to home improvements, “it would be included in a first mortgage loan.”

In 2025, Baumert said 64% of lender transactions used K-FIT.

Source: AlliedNews