Analysis shows the median price of Philadelphia-area homes is lower than many
think
PHILADELPHIA, Nov. 23 /PRNewswire-FirstCall/ -- Even though many residents
may think Philadelphia is an expensive place to live, the average price of a
Philadelphia home is just slightly above average when compared to the national
market.
According to Mark Casale, executive vice president, mortgage insurance for
Radian Guaranty, a provider of mortgage insurance products and services and
subsidiary of the global credit risk management company Radian Group Inc.
(NYSE: RDN), the median price of a home in the Philadelphia region is
$211,000, just slightly higher than the U.S. median of $208,000.
Philadelphians make an average monthly mortgage payment of $1100, based on a
30-year fixed rate loan.
"The median price of homes in Philadelphia's neighbor markets of New York
and Washington, D.C., is more than double the national median of $208,000,"
says Casale. "And Philadelphia residents will be surprised to hear that
average homes in Baltimore come in at $264,000, further above the national
average than Philadelphia."
Casale agrees this is good news for those looking to purchase a home in
the Philadelphia market, but acknowledges that current home owners looking to
sell could lose out. The cause of relatively reasonable home prices is low
appreciation.
"Although Philadelphia-area homes haven't appreciated as much as the
national average, Philadelphia has seen a 12 percent increase over the past
year," said Casale on his weekly KYW Newsradio commentary, giving hope to
those looking to sell.
Cities with average home values comparable to Philadelphia include
Colorado Springs, Colo., Milwaukee, Wis., and Palm Beach, Fla.
Who wins when borrowers decide they are ready for a piggyback?
With national home prices on the rise, many applying for a mortgage find
it difficult to put a large down payment on a new home. In this situation,
some lenders look to piggyback mortgages. In Casale's commentary on KYW, he
explains that a piggyback mortgage is when a homeowner combines a first and
second mortgage, and makes a down payment of less than 10 percent.
"With a piggyback mortgage, a lender proposes a first mortgage that covers
80 percent of the purchase price and a second that covers 10 percent. The
buyer's original down payment makes up the final 10 percent."
A piggyback mortgage allows the borrower to avoid using private mortgage
insurance, which may be required with a down payment of less than 20 percent.
Casale recognizes that sometimes a piggyback mortgage is better for the
lender or mortgage broker, but not the borrower, because the borrower may need
to refinance the home to pay off the piggyback mortgage. Refinancing will
cost the borrower money, when the intent was to use the piggyback mortgage to
save money.
Casale offers this advice to home buyers: "As with any large purchase, do
your homework before you buy, and to find out more, check out
http://www.privatemi.com."
About Radian Guaranty Inc.
Radian Guaranty Inc. is the mortgage insurance subsidiary of Radian Group
Inc. (NYSE: RDN), a global credit enhancement company headquartered in
Philadelphia. Radian Guaranty provides risk management products and services
to mortgage lenders nationwide; these services increase opportunities for
people to buy homes with little or no downpayment, protect lenders from
default-related losses on residential first mortgages and facilitate the sale
of low-downpayment mortgages in the secondary market. Additional information
may be found at http://www.radian.biz.
SOURCE Radian Guaranty Inc.
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Related links:
http://www.radian.biz
CONTACT:
For investors: Mona Zeehandelaar,
+1-215-231-1674, mona.zeehandelaar@radian.biz; For the media:
Corporate Communications, +1-888-NEWS-520, media@radian.biz, both
of Radian
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