Income to house cost ratio: Assuming pretax income, what is the marginal ratio?

most banks are going to go by 25%-30%

whether or not that is high, depends on your situation

when we first bought our house, it was in the 30% range, but we bought our house at the beginning of our earning potential with the plan to stay in the house long term

5 years later, that % has reduced by almost half

When I bought my house the total mortgage (plus insurance and property taxes) totaled 19% of my gross monthly income. If your credit is good you'll probably be able to get a loan that will put you closer to 30% but that's a very large chunk of your monthly income. I wouldn't go above the lower 20's.

Assuming a conventional, conforming mortgage, the typical high ratio would be roughly 28% of gross being allowed for PITI (and PMI) and 35% for total monthly debt payments. For a jumbo loan, atypical situation or an in-house/non-conforming loan, your mileage may vary.

This is an impossible question to answer. Home liquidity, net worth, what kind of a deal you got and how well value holds (along with many other examples) play an enormous role in this decision, not some arbitrary percentage.

Let's say you are looking at houses with the exact same specs, one in NOLA is 450k, and one in Lacombe is $225k. Lets just say this puts your mortgage at 50% and 25% of pretax income, until you lose your job and your mortgage is just a debt you can't pay either way. Would you prefer to have stretched your income more to pay for a house you can get rid of within the month? Or would you prefer to have the house that may take a year or more to get rid of?

Houses in uptown New Orleans are more expensive than houses in Lacombe, LA for a reason.

Now this example is a simplified one, and not intended to make one investment sound "better" than another. It is simply an illustration of how you can't just apply some set percentage to your income to see how much house you can "afford".

Also, IMO, never do any type of analysis like this on a pretax basis. Taxes are an expense, just like your house note, and are the one expense you can count on, you will never get out of them, and should be the first items deducted from your budget before any other expenses can be considered.

16% - Mortgage here in SoCal not including taxes,insurance and HOA dues. Don't forget upkeep. Adding everything up.. easily 22 to 25%. A house costs more than just the mortgage.