With rising inflation and house costs, it’s no wonder that people are beginning to question whether or not homeownership is still possible for the average worker. Your household budget is a reflection of your personal priorities. No two budgets are the same. That’s why it’s important to take a look at yours when thinking about how much house you can afford. Knowing how and where you’re spending money will give you a good idea of how a monthly mortgage payment will fit into your budget. But while your budget is specific to you, there are some common guidelines.
Homeownership Possible on Average Income
For example, the 28 percent rule. According to the rule, a household should spend no more than 28 percent of its gross monthly income on total housing expenses. This is a common standard used to determine housing affordability. If a house requires more than 28 percent of your income, it’ll likely be a struggle for you to afford it. With that in mind, ATTOM Data Solutions recently looked at how affordable median-priced homes are around the country. The data shows that homeownership remains within the average workers’ financial means. In fact, a median-priced home required 26.3 percent of the average national wage in the first quarter of 2022. That’s higher than previous quarters but still less than 28 percent, which means homeownership remains within reach despite increasing prices and mortgage rates. Follow the link for more information.
Here at A1 Mortgage, we know how important it is to choose the right house for you and your companion. We have the responsibility to provide you with the best products and the highest level of customer service possible. With hundreds of loan programs available, we tailor a loan specific to your needs. So come get pre-approved and start shopping for your dream home by clicking here!