30% of gross income for mortgage payment rule

That figure only matters for people making medium wage salaries, imo

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I could not fathom paying $5k+ per month for my mortgage, and we don't even have kids yet.

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Even the next house isn't going to be your forever home. You are more likely committing to a 7-9 year payment.

You don't hold the cards here, your wife does. If she decides she wants a larger laundry room, or she doesn't like your cabinetry in five years, you'll drop $60k on a reno or move house. This isn't me woman hating, it's just the truth of how most marriages work.

It's never good to be house poor. It limits trips, extra curriculars, paying off cars, saving for emergencies, retirement, college, etc,

My 2200 payment wasn't bad. The 24k of property taxes on top of that was shitty but manageable. Then, the assessment district announced they were intending to raise my property value 40% over 4 years (bringing taxes to nearly double my mortgage.) Even without the divorce, that was a no go.

What I've noticed even in moderately priced houses ($300k) is there are a lot of cars in the driveway. Two generations living together to afford it, etc. Not getting racial, but there are some circumstances that are fine (think birthday parties for 2 year olds that go on to 3AM with 15 cases of beer) and some that are not.

I digress, as usual. Treat the 30% gross like the diamond industry telling you that you need to spend 1/4 of your annual income on a ring that nobody will notice after it gets shown off the first week of the engagement.

Do what you're comfortable with. It's always a trade off, mainly involving how far your commute is. If your commute is more than 40-45 minutes, HP did a study that was the biggest factor as to if staff were going to find another job or not. Mine is I won't be more than 25 minutes from an H-E-B , and I can't be more than 20m from my kids (not a constraint you have.)

There is a lot of opportunity outside of currently popular hoods, at least in W Houston (Katy, Brookshire, etc.) There will clearly be some level of suffering to come for great deals (2 lane roads that seem fine now, but won't be when 2000 more houses are built between you and the Interstate, etc.)

I wouldn’t worry about % of income. We never have. We were 22-23% of after-tax income.

There are a couple of ways to think of it. Find the nicest neighborhood you think you can afford and buy the shittiest house in it to drive down everyone’s value . Or find a neighborhood you’re ok with at a lower price.

I still think the “buy at your 30% gross income” was set by realtors. There’s no need.

We are now living in a rougher house but no mortgage. Saving to build a retirement house to age in with cash. If we had kids I’d try my might to help them buy a house free and clear. It’s probably the biggest anchor we all have. Owning a house frees up so much cash to build wealth.

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what do yall usually recommend for a housing budget?

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My inner voice:

House-first mindset instead of live-below-means first can destroy wealth building no matter how we try to convince ourselves (eg, it’s the forever home). Not saying this is you, but have seen fair share of status-centricity (if that is a word) and will to live for status at expense of financial independence, ironically, too many times.

The status tax is every bit as bad as many government taxes.

Inner voice aside:
Income - investments = expenses

Do it.

This algebra afforded us early retirement, control of time and financial independence and peace of mind that, looking back, is far more impactful to our family’s life than a spacious (insert room name) of new home.

And we lived in some really nice homes in some really nice places around US and world along the journey.

To answer your question specifically, our experience was 10-25% range of home cost (P&I, insurance, property taxes, HOA, maintenance, exterminator, lawn svc if you have) of gross income. Worked in big earl. Had some nice relocation packages along the way that pumped equity so not avg comparison perhaps.

Get you a great home for your family. Just recommend that you don’t tax your future self / wealth greater than can afford…your future selves may thank you.




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We're at 4% of gross.

30% of gross would make me sweat.

Can't stay put and save up? I have a feeling either rates will fall or prices will fall in the next couple of years.

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The Texas posters are obviously in a much different world than I am (my property tax is something like 0.67%, but no telling what it may become when i move).

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Yeah, Texas offsets the no income tax for property tax.

For those homes I mentioned above, you are going to pay around 12-15k in property tax after homestead. Its ridiculous.

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You don't hold the cards here, your wife does. If she decides she wants a larger laundry room, or she doesn't like your cabinetry in five years, you'll drop $60k on a reno or move house. This isn't me woman hating, it's just the truth of how most marriages work.

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This version of marriage sucks. I’m thankful my wife is a partner financially versus the scenario you painted. Of course we can daydream about “what if” but she’s very grounded.

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Treat the 30% gross like the diamond industry telling you that you need to spend 1/4 of your annual income on a ring that nobody will notice after it gets shown off the first week of the engagement.

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30% gross is arbitrary. Percentage of take home is a better measure and I would go a step further as decisions should be made on actual dollar basis not percentages.

Factor in that kids will be expensive. Tuition for my kids is basically another mortgage.

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so maybe it's just me who isn't willing to spend that much?

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You aren't alone. Do not be fooled.

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So what do yall usually recommend for a housing budget?

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As little as possible. Your life will be much better not being "house broke" and having the freedom to do other things with extra money.