How to Buy a House in Pittsburgh
A step-by-step guide for first-time and returning buyers
Key takeaways
- Limited inventory and intense competition among buyers mean purchasers must be strategic and well-prepared to land a home that meets their needs and budget.
- Step one for first-time and veteran homebuyers is pinpointing the amenities they can’t live without – whether it’s a walkable neighborhood with easy access to restaurants and culture or leafy backyards and good schools.
- Your real estate agent and lender are your support team and will help you develop a budget and find the home that fits your unique needs.
Pittsburgh, Pennsylvania is a competitive city. It’s a place that cheers hard for its Steelers, Pirates and Penguins and is accustomed to celebrating championships.
These days, the city’s housing market is as competitive as its sports teams. “We’ve always prided ourselves on the stability of the homebuying market,” says Anthony Feola, a Mortgage Loan Officer at Northwest Bank in Pittsburgh. “That has changed over the past five years.”
One major reason for the surge in competition is simple supply and demand; there are more buyers than available homes.This imbalance is partly due to the influx of tech companies moving to Pittsburgh in recent years, bringing in new workers eager to purchase homes. Additionally, many current homeowners refinanced during the historically low interest rates of 2020 and 2021 and are now reluctant to move with rates significantly higher.
“People aren’t willing to sacrifice an interest rate that would essentially triple if they purchased a new home, even if they’ve outgrown their current home,” Feola says. “They're holding their homes longer, and that’s reducing inventory and making it more competitive for homebuyers.”
Stiff competition demands a strategic approach
While Pittsburgh's market is competitive, you can still land the home you want in your preferred neighborhood. The good news: Though desirable to homebuyers, Pittsburgh remains affordable. The median home price in Pittsburgh is just over $250,000, compared to about $403,700 nationally.
Finding the right home requires a strategic approach to homebuying and bringing in as much expertise and support as possible. Here are five tips to guide you:
Tip one: Decide what you can’t live without
For most buyers, home purchases involve tradeoffs. Being clear about what you prioritize in a home and a neighborhood will help you narrow down your options.
“Identify the amenities that are truly difference makers for you,” Feola says. “Maybe you can’t live without a big backyard for your dog, and you’re willing to sacrifice other things to get that yard. That will help you decide the community, market or neighborhood you want to be in.”
Tip two: Complete a financial self-assessment
Whether you're buying your first home or have been through the process before, setting yourself up for success begins with a thoughtful financial self-assessment. By taking a detailed look at your monthly income and expenses, you can gain a clearer understanding of what you can realistically afford in mortgage payments. This insight not only helps you budget effectively but also leads to more productive and informed conversations with lenders and realtors.
“When the lender starts talking to you, they’re going to say things like debt-to-income ratio, down payment, principal, interest, escrow payments, insurance and taxes,” Feola says. “That self-assessment is a great start because when the lender comes in, they’ll be able to quickly educate you about what down payment requirements are, how escrow impacts monthly payments and what you can expect to pay at closing.”
Tip three: Establish a budget and work closely with a lender and realtor
Layering mortgage and local real estate expertise on top of a rigorous financial self-assessment helps establish a realistic budget and focus your home search. A knowledgeable realtor, for instance, will connect your budget and the amenities you prioritize to actual homes in neighborhoods. Realtors will also have a good sense of what separates successful buyers from those who are disappointed. Should you bid more than the asking price? Is it ever okay to waive inspections?
Hyper-local knowledge is also essential to understanding affordability. For example, closing costs vary considerably by location. "Within the city of Pittsburgh, transfer taxes are 5%, whereas in a neighborhood in the north or south of Pittsburgh that's not located within city limits, the transfer taxes are 2%,” Feola says. “You’re looking at a sizable cost difference based on the neighborhood where you're looking at houses. Most realtors know that. Most lenders know that. That’s why it's good to have both of those resources in your corner.”
Tip four: If you haven’t bought a house in the last seven years, you’re a new homebuyer
The Pittsburgh market has changed significantly over the years. Twenty years ago, for instance, it was common to bid well below a home’s asking price and have that bid accepted. That’s not the case any longer.
“There's probably going to be 15 people making an offer on it. If you love it, then you might have to pay a little bit more than what the list price is,” Feola says. “That’s why knowing what is most important to you in a home really matters.”
Tip five: Buying a home is not stress-free — and that’s okay
Purchasing a home is a big deal. Any monumental decision can involve some stress. However, being proactive, prepared and supported by experts is the best way to minimize unnecessary stress.
“We can't promise that we're going to eliminate every stressor,” Feola says. “But having a realtor and a solid lender in your corner will give you as much knowledge and comfort in the home buying process as you could possibly want or need.”
Contact Northwest Bank to connect with a lender who can help demystify the Pittsburgh real estate market and catapult you ahead of the competition.
