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  1. Housing

How Much House Can You Afford? Many Buyers Are Ignoring a Classic Rule of Thumb

By: Brenden Rearick
Brenden Rearick
Reporter | Joined March 2023
Brenden Rearick is a news reporter for Money who covers mortgages, real estate and lots of other personal finance topics. He has been a news reporter for Money since March of 2023.
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Editor: Brad Tuttle
Brad Tuttle, expert in Personal finance, shopping, consumer trends, and Senior Editor at Money
Brad Tuttle
Senior Editor | Joined January 2014
Brad Tuttle is a senior editor at Money with over 10 years’ experience covering a vast number of personal finance topics, including careers, cars, travel, budgeting, investing, insurance, credit cards, consumer psychology, real estate, banking, and shopping and deals.
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Published: Nov 14, 2023 4 min read
Couple standing in-front of a very tall, narrow house with a pink sky in the background
Money; Getty Images; Shutterstock

The finance world is full of rules that, while not set in stone, help people to stay within their budgets and making sound decisions for their money.

One of those rules is to keep mortgage payments under 28% of your household income. However, thanks to today's high mortgage rates and elevated housing prices in general, first-time homebuyers are spending well beyond that recommended 28% figure: Typical payments for this group now account for over 40% of their gross income.

High mortgage rates have buyers spending big