Allentown, Pennsylvania, has experienced steady but moderate growth in housing prices in recent years, remaining more affordable than national averages. The market is characterized by balanced supply and demand, with rising prices offset by increasing inventory and buyer affordability.

The housing market in Allentown has shown consistent appreciation, though growth is slower compared to high-demand urban areas. As of 2023, the median home price in Allentown was approximately $250,000, reflecting a 5-7% annual increase from 2022. This growth aligns with broader trends in Pennsylvania, where low interest rates and a recovering economy have boosted buyer activity. However, prices remain 20% below the U.S. median of $313,000, according to the National Association of Realtors (NAR). Inventory levels have risen to 2.5 months, a 15% increase year-over-year, indicating improved buyer leverage.

Affordability is a key driver, with the local median household income of $65,000 translating to a price-to-income ratio of 3.8, below the national 4.5. This is partly due to older housing stock and limited new construction, which constrains supply. Additionally, remote work trends post-pandemic have encouraged some buyers to seek suburban alternatives, though Allentown’s proximity to Philadelphia and Scranton limits extreme price surges. Data from the Lehigh Valley Association of Realtors (LVAR) shows a 12% rise in closed sales in 2023, outpacing the state’s 8% growth. However, rising mortgage rates in late 2023 may temper future gains.

Economic factors like manufacturing job growth in the region and state tax incentives for buyers have also supported demand. Yet, challenges such as aging infrastructure and limited school district quality in some areas could affect long-term appreciation. Overall, Allentown’s housing market is stable, with prices expected to grow modestly (3-5% annually) as long as economic conditions remain favorable.