Since your mortgage will likely be among your biggest monthly bills, you’ll want to give some thought to how much of your income you’d be comfortable putting toward it. Conventional wisdom says that you shouldn’t spend more than 30 percent of your income on housing.
Historically, Americans’ mortgage payments have been closer to 21 percent of their income, according to Zillow. These days, it’s even lower. At the end of last year, the mortgage payment on a typical home required about 17.5 percent of the median income. Of course, that also depends on where you live.
For example, the percentage of income you’d spend on a mortgage payment in Cleveland is about half of what the typical New Yorker spends. Wherever you are, you should consider your household expenses, income, and prospective payments before heading out to find a house. This will help you avoid buying more than you can comfortably afford.