The Obama Administration’s Efforts to Stabilize the Housing Market and Help American Homeowners | July 2014 U.S. Department of Housing and Urban Development | Office of Policy Development and Research

U.S Department of Housing and Urban Development

Spotlight on the Housing Market in the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA | Page 1

Spotlight on the Housing Market 

in the Philadelphia-CamdenWilmington, PA-NJ-DE-MD MSA

The Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Metropolitan Statistical Area (Philadelphia MSA) includes 11 counties located in 

southeastern Pennsylvania, south-central New Jersey, northern Delaware, and northeastern Maryland. As with similar areas along the East 

Coast, the initial downturn from the foreclosure crisis was less severe than in some areas of the nation but the recovery from the crisis and 

subsequent recession has been slower. In the years leading up to the housing crisis, the Philadelphia MSA experienced levels of new home 

construction which exceeded household growth and a rise in home prices which surpassed the national appreciation by 8 percent. After the 

bubble burst, home prices in Philadelphia fell by 17 percent, which was only half the national drop in prices of 33 percent. The lower property 

values and the resulting underwater mortgages were fueled by unsustainable mortgage lending and investor speculation going into the crisis. 

The rise in unemployment during the recession added further to rising defaults and the decline in property values. The share of mortgages at 

risk of foreclosure (those 90 or more days delinquent or in the foreclosure process) did not peak until the beginning of 2013—three years later 

than for the nation—and at a much higher rate, although the share of distressed mortgages was higher going into the crisis. Contributing to 

the high share of distressed mortgages are longer than average foreclosure processing times in Pennsylvania and New Jersey, which keep 

homes in the foreclosure pipeline longer. The share of mortgages at risk of foreclosure has begun to decline in Philadelphia–the result of four 

years of modest job growth, fairly stable gains in home prices, and local legislation in 2008 that sharply curtailed foreclosure activity. The 

Administration’s broad approach to stabilizing the housing market has been a real help to homeowners in Philadelphia and the surrounding 

area. This addendum to the Obama Administration’s Housing Scorecard provides a summary of local economic trends and conditions and the 

impact of the Administration’s efforts to stabilize the housing market and help local homeowners. 

Population Growth, Employment, 

and Housing Market:

With nearly 6.0 million people according to the most recent 

Census, the Philadelphia MSA is the 6th largest in the nation. 

From 2000 to 2010, the population increased by an average 

of 27,800 people, or 0.5 percent, a year. Natural population 

growth (births minus deaths) accounted for 83 percent of 

population growth during this period. An average of nearly 

4,925 people per year moved to the Philadelphia MSA 

during the last decade and accounted for the remaining 17 

percent of the net population increase. 

Philadelphia MSA Housing Unit Growth Outpaced Population and 

Household Growth During the Past Decade

Date of Census 4/1/2000 4/1/2010

Philadelphia MSA Population 5,687,147 5,965,343 

 Annual Growth Rate - 0.5%

Philadelphia MSA Households 2,134,404 2,260,312 

 Annual Growth Rate - 0.6%

Philadelphia MSA Housing Units 2,281,825 2,433,611 

 Annual Growth Rate - 0.7%

Source: Census Bureau (2000 and 2010 Decennial)

During the decade spanned by the Census, new housing production 

exceeded household growth in Philadelphia. Net annual housing 

unit growth of 0.7 percent in the Philadelphia metropolitan area during the last 

decade was greater than the corresponding population and household growth 

rates of 0.5 and 0.6 percent, respectively. However, according to the Census 

Bureau, the rate of increase in vacant units in the Philadelphia metro area during 

the 2000s was less than half the national rate, with vacant units increasing at 

an average annual rate of 1.8 percent, compared with 4.4 percent nationally. 

Investor speculation stimulated some overbuilding in the years leading up to the 

housing crisis, as a relatively large share of home purchases in the MSA were 

by non-occupant investors. Specifically, from 2000 to 2005 investor home sales 

rose from 8.3 to 20.0 percent of total sales in the Philadelphia Metropolitan 

Division, while the corresponding increase for the nation was from 8.0 to 14.6 

percent. Subprime lending also contributed to overbuilding in the Philadelphia 

MSA. A study by the National Bureau of Economic Research indicates that the 

Philadelphia MSA ranked 57th out of the top 107 metros with the highest share 

of subprime originations during 2005, with subprime originations as a share of 

new mortgages at 18 percent in Philadelphia. A conservative estimate based on 

HMDA (Home Mortgage Disclosure Act) data indicates that high-cost (proxy for 

subprime) originations tripled nationally between 1998 and 2005, while a study 

by the Center for Responsible Lending estimates that approximately 90 percent of 

subprime mortgages during that period faced increases in monthly payments of 
The Obama Administration’s Efforts to Stabilize the Housing Market and Help American Homeowners | July 2014 U.S. Department of Housing and Urban Development | Office of Policy Development and Research

Spotlight on the Housing Market in the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA | Page 2

U.S Department of Housing and Urban Development

30 to 50 percent within a few years, causing subprime loans 

to typically default at more than 7 times the rate of other 

mortgages.

Philadelphia’s economy is improving. The local 

economy was growing slowly before it began to decline in 

2008. From the first quarter of 2004 through the first quarter 

of 2008, jobs increased at an average annual rate of 0.8 

percent, compared with a national increase of 1.4 percent 

during the same period. The impact of the Great Recession 

was not as severe for the Philadelphia metropolitan area 

as it was for the nation. Jobs in the MSA declined at an 

average annual rate of 2.4 percent, from the second quarter 

of 2008 through the first quarter of 2010, compared with 

a national decline of 3.1 percent. The recovery from the 

recession has been weaker for the Philadelphia MSA than 

for the nation, however, with jobs increasing at an average 

annual rate of 0.6 percent from the second quarter of 

2010 through the first quarter of 2014, compared with a 

1.5-percent increase nationally.

The Philadelphia MSA is known for its hospitals and 

institutions of higher learning. During the recent recession, 

a period when every other private sector in the MSA lost 

jobs, the education and health services sector expanded 

at an average annual rate of 1.7 percent. Job losses were 

most severe during this period in the construction and 

manufacturing sectors, which declined at average annual 

rates of 11.9 and 7.2 percent, respectively; job losses were 

also substantial in the financial sector (4.1 percent). The 

recovery from the recession has been led by the leisure and 

hospitality and professional and business services sectors, 

which expanded by average annual rates of 2.5 and 1.9 

percent, respectively. Gains in the education and health 

services sector continued, but slowed to an average rate 

of 1.3 percent during this period. Growth in these sectors 

was offset by average annual job losses of 2.5 percent 

in the information sector and 2.3 percent in the federal 

government. The unemployment rate for the Philadelphia 

MSA peaked at 9.0 percent in April 2010 and has 

since fallen to 6.1 percent as of June 2014. The national 

unemployment rate peaked in October 2009 at 10.0 

percent, falling to 6.1 percent by June 2014.

Home sales in Philadelphia are improving. 

After reaching a peak of 82,700 units sold in 2005, 

purchases of existing homes in the metropolitan area declined 

between 2006 and 2011, first by an average annual rate 

of 15 percent from 2006-2008 and then at the slower pace 

of 8 percent from 2009-2011. Existing home sales began to 

rise again 2012 and 2013, increasing at an annual rate of 

14 percent (although on a much lower base) to reach sales of 

44,000 during 2013. By comparison, existing home sales in the nation peaked 

in 2005 and declined by an annual rate of 14 percent between 2006 and 2008; 

existing home sales began to rise in 2009, increasing at an annual rate of almost 

5 percent from 2009 to 2013. Purchases of new homes in the Philadelphia 

MSA peaked in 2005 at 8,700 units, before falling from 2006 through 2011 

at an annual rate of 13 percent. New home sales have since stabilized at 

approximately 2,275 units, increasing over the last two years at an annual rate 

of 16 percent (albeit on a low base). Nationally, new home sales also peaked 
The Obama Administration’s Efforts to Stabilize the Housing Market and Help American Homeowners | July 2014 U.S. Department of Housing and Urban Development | Office of Policy Development and Research

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U.S Department of Housing and Urban Development

in 2005 before declining by an annual rate of almost 13 

percent from 2006 through 2011; sales have increased since 

at an annual rate of 20 percent (also on a low base). 

Home prices in Philadelphia climbed higher but 

fell later and less steeply than for the nation 

during the housing crisis. The CoreLogic repeat-sales 

house price index (HPI) shows that home prices in the 

Philadelphia MSA peaked 14 months after and rose 8 

percentage points higher than for the nation, but had a 

less-pronounced decline. Home prices in the metropolitan 

area fell 17 percent from their peak in June 2007 to their 

low in November 2012 compared with a national peak-tolow decline of 33 percent (ending February 2012). Investor 

speculation had an impact on the rise in home prices in 

the Philadelphia MSA, with sales to investors averaging 14 

percent in Philadelphia during the bubble—higher than the 

11 percent share nationally. As described earlier, subprime 

lending was also a factor in fueling home prices in the 

Philadelphia MSA. Since reaching their low point, home 

prices have increased by 7 percent in the Philadelphia 

metropolitan area–one-fourth the 28-percent low-to-current 

increase for the nation. Home values in the Philadelphia 

MSA are currently on par with prices in mid-2005.

The apartment vacancy rate in Philadelphia has 

closely tracked the national vacancy rate during 

the past three years. According to MPF Research, 

the Philadelphia MSA apartment vacancy rate was 4.9 

percent in the first quarter of 2014, down from 5.4 percent 

a year earlier, representing generally balanced supply and 

demand for apartments. The decrease in the vacancy rate 

occurred despite increased construction because demand 

for rental housing was extremely high during the prior 

year. The national apartment vacancy rate was relatively 

unchanged at 5 percent over the same period. During the 

first quarter of 2014, the average apartment rent in the 

Philadelphia MSA increased 1.4 percent from a year earlier 

to $1,132, compared with a nationwide increase of 3.4 

percent to $1,130. Overall rental market conditions in the 

Philadelphia metro area remain weaker than the apartment 

market due to a high number of vacant single-family rental 

properties. According to the CPS/HVS (Current Population 

Survey/Housing Vacancy Survey) conducted by the Census 

Bureau, as of the first quarter of 2014 the overall rental 

vacancy rate for the Philadelphia MSA was 10.2 percent 

compared to a national rate of 8.3 percent. The 2012 ACS 

(American Community Survey) indicates that single-family 

homes accounted for 12 percent of all rental units in the 

Philadelphia MSA, while representing 29 percent of all rental 

units in the nation. 

Trends in Mortgage Delinquencies and 

Foreclosures: 

The rate of mortgages at risk of foreclosure in Philadelphia has 

begun to decline, after peaking 3 years later than nationally. 

According to Black Knight Financial Services, Inc., as of May 2014 the 

Philadelphia MSA placed 46th out of 381 metropolitan areas ranked by share of 

mortgages at risk of foreclosure (90 or more days delinquent or in the foreclosure 

process). From 2000 through most of 2005, the share of mortgages at risk of 

foreclosure in the Philadelphia MSA was higher than the national rate by more 

than 1 percentage point, and began to converge with the national rate from the 

end of 2005 through 2006, according to CoreLogic data. In 2007 and 2008, 

when the foreclosure crisis began and single-family foreclosures were largely 

driven by unaffordable non-traditional loan products, the increase in mortgages 

at risk of foreclosure in the Philadelphia MSA mirrored the rise nationally. From 

the beginning of 2007 to the end of 2008, the share of distressed mortgages in 

Philadelphia rose from 2.2 to 4.6 percent, compared with a national increase of 

1.6 percent to 4.4 percent. Beginning in 2009, foreclosures were increasingly 

driven by loss of income, unemployment, and strategic defaults as the economy 

worsened, according to research by the Federal Reserve Bank of Chicago. A 

sharp spike upward in the rate of distressed mortgages occurred in 2009 for 

both the Philadelphia MSA and the nation. By early 2010, mortgages at risk of 
The Obama Administration’s Efforts to Stabilize the Housing Market and Help American Homeowners | July 2014 U.S. Department of Housing and Urban Development | Office of Policy Development and Research

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U.S Department of Housing and Urban Development

foreclosure peaked at 8.0 percent nationally and have since 

fallen to 4.1 percent. The share of distressed mortgages in 

the Philadelphia MSA continued to increase for another 3 

years, peaking at 9.6 percent in the beginning of 2013; 

it has since fallen to 8.1 percent. The share of distressed 

mortgages in the Philadelphia metro has begun to decline 

at a faster rate. Over the last year, mortgages at risk of 

foreclosure in Philadelphia decreased by 25 percent–from 

54,000 to 40,700–compared with a national decline of 17 

percent over the same period. At least a partial explanation 

for the higher share of distressed mortgages in Philadelphia 

relative to the nation is a longer foreclosure processing 

timeline. As of the first quarter of 2014, the average time to 

complete a foreclosure was 633 days in Pennsylvania and 

1,103 days in New Jersey, much higher than the national 

average of 572 days. 

Realty Trac data show foreclosure completions in 

Philadelphia have trailed the national rate. From 

April 2009 through June 2014, the number of foreclosure 

completions as a percentage of all housing units was 1.6 

percent in Philadelphia, much lower than the 2.9-percent rate 

for the nation. Foreclosure completions have been trending 

downward nationally and in the Philadelphia MSA since 

2011; however, during the first and second quarters of 2014, 

foreclosure completions ticked up slightly (7 percent) from 

a year earlier in the Philadelphia metropolitan area. This 

represents a foreclosure completion rate of 0.06 percent, on 

par with the national rate during the same period. 

The efforts of numerous state and local entities and financial 

institutions in partnership with the federal government have 

helped contain the rate of foreclosures. One local initiative 

is the Residential Mortgage Foreclosure Diversion Program, 

which was created pursuant to a court order from the First 

Judicial District of Philadelphia Court of Common Pleas of 

Philadelphia County in April 2008; it has saved nearly 7,500 

homeowners from foreclosure in the City of Philadelphia. 

The need for recovery efforts continues, as 10.5 percent of 

mortgages in the Philadelphia MSA remain underwater as of 

the first quarter of 2014 according to CoreLogic, although this 

is down from 16.1 percent a year earlier. This compares to 

a 12.7-percent share of underwater borrowers for the nation 

during the first quarter.

The Administration’s Efforts to Stabilize the 

Philadelphia MSA Housing Market

The Administration’s mortgage and neighborhood assistance programs–the Home 

Affordable Modification Program (HAMP, which is part of the broader Making 

Home Affordable program), the Federal Housing Administration (FHA) mortgage 

assistance programs, the Neighborhood Stabilization Program (NSP), and the 

Hardest Hit Fund (HHF) program–combined with assistance from the HOPE Now 

Alliance of mortgage servicers and the National Mortgage Servicing Settlement 

have helped stabilize the Philadelphia MSA housing market.

From the launch of the Administration’s assistance programs in April 2009 

through the end of May 2014, more than 151,800 homeowners have received 

mortgage assistance in the Philadelphia metropolitan area. Nearly 89,000 

interventions were completed through the HAMP and FHA loss mitigation and 

early delinquency intervention programs. An estimated additional 62,800 

proprietary mortgage modifications have been made through HOPE Now 

Alliance servicers. While some homeowners may have received help from more 

than one program, the number of times assistance has been provided in the 

Philadelphia metropolitan area is more than 4 times the number of foreclosures 

completed during this period (37,300). 

Under the landmark National Mortgage Servicing Settlement in February 2012, 

more than 9,418 Pennsylvania homeowners have benefitted from over $438 

million in refinancing, short sales and completed or trial loan modifications, 

including principal reduction on first and second lien mortgages provided as of 

June 30, 2013. Nationwide, the settlement has provided more than $50 billion 

in consumer relief benefits to more than 631,000 families. That is in addition 

to the $2.5 billion in payments to participating states and $1.5 billion in direct 

payments to borrowers who were foreclosed upon between 2008 and 2011.

Given over three rounds, the Neighborhood Stabilization Program

has invested $7 billion nationwide to help localities work with non-profits and 

community development corporations to turn tens of thousands of abandoned and 

foreclosed homes that lower property values into homeownership opportunities 

and the affordable rental housing that communities need. 

NSP1 funds were granted to all states and selected local governments on a 

formula basis under Division B, Title III of the Housing and Economic Recovery Act 

Foreclosure Completion Rates in the Philadelphia MSA

Area

Second Quarter 2014 Since April 1, 2009

Foreclosure 

Completions

Foreclosure 

Rate

Foreclosure

Completions

Foreclosure 

Rate

Philadelphia MSA 1,580 0.06% 37,840 1.6%

Nation 85,300 0.06% 3,869,600 2.9%

Note: Foreclosure Rates as Percent of All Housing Units; 

 Data through December 2013 for foreclosures since April 2009

Source: Realty Trac and Census Bureau
The Obama Administration’s Efforts to Stabilize the Housing Market and Help American Homeowners | July 2014 U.S. Department of Housing and Urban Development | Office of Policy Development and Research

Spotlight on the Housing Market in the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA | Page 5

U.S Department of Housing and Urban Development

(HERA) of 2008; NSP2 funds authorized under the American 

Recovery and Reinvestment Act (the Recovery Act) of 2009 

provided grants to states, local governments, nonprofits and 

a consortium of nonprofit entities on a competitive basis; and 

NSP3 funds authorized under the Dodd–Frank Wall Street 

Reform and Consumer Protection Act of 2010 provided 

neighborhood stabilization grants to all states and select 

governments on a formula basis.

In addition to stabilizing neighborhoods and providing 

affordable housing, NSP funds have helped save jobs. 

Each home purchased, rehabilitated and sold through the 

NSP program is the result of the efforts of 35 to 50 local 

employees. 

Overall, a total of $86.8 million in NSP funds has been 

awarded to three grantees in the Philadelphia MSA: the City 

of Philadelphia, Camden Development Authority, 

and the Housing Authority of Camden City. In 

addition, a total of $34.6 million in NSP funding was 

awarded to the State of Delaware, of which $22.4 million 

has been sub-allocated to the City of Wilmington and New 

Castle County in the Philadelphia MSA. Approximately 529 

households in the MSA have already benefited from NSP 

and activities funded by the program are expected to provide 

assistance to an additional 802 owner-occupied and renter 

households. 

The City of Philadelphia received a total of $60.7 

million in NSP funding. The City targeted NSP investments 

in areas where foreclosure rates were found to be high but 

where vacancy and abandonment rates were relatively low, 

including development activities in the Mantua, Nicetown, 

and Point Breeze neighborhoods, among others. The City 

encouraged for-profit and nonprofit, minority and women real 

estate developers to participate in the program. Twenty-six 

developers participated in the NSP program, of which 45 

percent were minority, women or disabled-owned small 

businesses. The following are examples of NSP funded 

projects in the City of Philadelphia.

• In the Point Breeze neighborhood, the City of 

Philadelphia invested $8 million to construct 40 homes–

18 homes for households earning less than 120 percent of 

area median income (AMI) and 22 homes for households 

earning less that 80 percent of AMI. Six of the homes have 

been designed to be accessible by people with disabilities 

and minority-owned entities were awarded 84 percent of 

the contracts.

• Another NSP project in the Point Breeze neighborhood is the Patriot House, 

which was developed by CATCH (Citizens Acting Together Can Help, Inc.) 

The Patriot House provides 15 units of affordable permanent supportive rental 

housing for chronically homeless veterans. In addition to providing permanent 

housing, it offers a continuum of care to its tenants. Program coordinators 

along with case managers work closely with the formerly homeless veterans 

to access services and resources to increase their quality of life, stability, and 

integration into the community-at-large.

• In the Fairhill neighborhood, the Women’s Community Revitalization Project 

built Evelyn Sanders II Townhouses, 31 units of affordable rental housing 

serving very-low and low-income households. The development site was 

previously overrun with abandoned buildings and vacant lots. 

• In a building that was previously vacant and foreclosed, the Gaudenzia 

Foundation redeveloped Shelton Court, located on North Broad Street in 

the East Oak Lane neighborhood, into 20 permanent supportive housing 

units for formerly homeless families, working specifically with female heads of 

households in recovery from chronic substance abuse and reuniting them with 

their children.

The Philadelphia MSA has also benefitted from an allocation of $300.5 million 

from the Administration’s Hardest Hit Fund to the state of New Jersey. The 

New Jersey Housing and Mortgage Finance Agency (NJHMFA) administers 

these Hardest Hit funds through the New Jersey HomeKeeper Program, 

which was launched statewide in May 2011. HomeKeeper offers mortgage 

payment and reinstatement assistance for New Jersey homeowners who are 

unemployed or underemployed through no fault of their own and are at high risk 

of default or foreclosure. Through the program, NJHMFA provides twenty-four 

months or up to $48,000 in monthly mortgage payment assistance paid to the 

servicer on behalf of the qualified homeowner; the program also provides up to 

$48,000 in reinstatement assistance for recently re-employed homeowners to 

cure delinquent payments, escrow shortages, and/or delinquent property taxes 

to avoid foreclosure. Due to high volumes and growth in borrower participation, 

New Jersey HomeKeeper stopped accepting new applications on November 30, 

2013, but will continue reviewing existing applicants for assistance until 

all program funds have been committed. For additional information, see 

https://www.njhomekeeper.com/.

Philadelphia MSA Housing Units to Date Benefitting 

from NSP by Type of Activity 

 Construction or Rehabilitation 262

 Demolition and Clearance 19

 Homeownership Assistance to low- and moderate-income 248

Total Housing Units 529

Additional Projected Housing Units 802