The housing crisis has highlighted just how many people are living in homes they can't afford. According to data recently released by the US Census Bureau, about 15 percent of American with mortgages are spending at least half their income on housing costs. Do you know how much the government and most lenders say is the most you should spend on housing costs?
We're in the same boat, trying to buy a house. I am so upset at these irresponsible mortgage companies, because now our mortgage lender is making us jump through hoops to make sure we won't end up in foreclosure.
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I currently spend more than 30%, and have been doing so since day 1...Quietly job hunting for better pay.
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Anyone know if this is pre or post-tax income?
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I think it's gross, so before taxes are taken out.
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ugh. i'm a renter, and I spend more than 30%. ah, life in LA.
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I pay about 30% and I actually feel like it's too much. 
ha. Maybe just cause I see
to much of my money going there it by association feels like too much?
*too much
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the only reason that i knew the answer to this one is because i'm constantly trying to find that balance and i've read what my expectations should be soo many times that i'm always trying to get to that sweet spot. no luck yet!
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The only reason I knew this is because I am researching for future reference the in and outs of buying.
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Congrats Renees3, on your new place.
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I'm really good at guessing 
. Do you have a rent vs. own calculator that's
geographically specific? I live in Miami. Although I've lived in better rental markets, the rental market here is really good right now. Too much inventory on the market...
GiGiG - Here's one from a florida website so I'm sure it's pretty accurate for your area.
http://www.homefloridarealty.net/rent-vs-buy-calculator-florida.htm
You'd be surprised what you can afford. We're buying a foreclosure that our mortage will be around $60 more than our current rent. And it's Half the price it was 2 years ago. It's an amazing deal. They're out there!
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30% is still a lot when that amount is committed every month. I can't believe how many people push the percentage even higher.
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Ooh! I *just* signed a contract for buying my first home. Another good rent vs. buy calculator is http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html. You can change the appreciation costs of housing in your area, and use the 'advanced' toolbar on the right hand side to add more detail. We used this a TON throughout the home searching process.
And I'm really excited to announce that because of this post, I ran the calculation and we're spending 12% of our income on housing. ... We played it safe with the first home purchase!
This number, just like FPL, is long overdue to be revised, and then indexed to inflation. It doesn't account for the huge increases in transportation and medical expenses families are paying since this figures inception.
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I try to stay around 20-33%, any more I feel is really unwise - particularly if you are bound to ownership.
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We're in the process of buying a house right now so I've been doing all my research on this sort of thing!
1You should do a post on how not to get screwed on closing costs! I can't believe how those add up!