What percentage of your income do you spend on housing?

[poetdereves]

DW and I are in the middle of buying a new home and went back and forth with how much we would spend vs. what we qualified for. Appraisals and approvals are through the roof in this current market, but given our growth in income and family size since we purchased our current home, we find it beneficial to move. We have only looked at four homes in the past 18 months because we don't want something too big, too old, and without some "must haves" we listed out well in advance. It also had to be well below what we could spend because I want to continue maxing out our investments instead of redirecting the money into our mortgage, which I don't necessarily consider an "asset".

Our PITI will be just over 14% of our income, which I recently found out is well below the suggested amount that people say you should spend on housing. It is quite a bit more than we are spending now, but still well within a Mustachian amount I would think.

It is hard to find housing cost info for the more FIRE minded folks compared to the average, so I figure I'd get a sample size from some more financially savvy folks just to see what the more likely trends are!

[RWD]

Our PITI is around 11-12% of gross income. Next house will likely be much higher due to a variety of factors.

[JLee]

8.8% of gross, but 16.7% if you include property taxes and insurance.

Edit: That's inclusive of roommate income.

When I bought the house in 2019, I qualified solely on my income without any rental income and I was around 28% all in, ~22% after roommate income.  Since then I've refinanced down to 2.5% and massively increased my income.

[Finwiz]

We’re at 9.2% of our gross all in (damn prop taxes at 1500/mo alone), but that’s net of the rent we receive for the other unit downstairs.

From having bought just 8 months ago, I understand some of what you’re going through regarding the approvals process. I thought it was absolutely insane what they were willing to lend us, and how little they really needed to do it. We ended up buying $1m+ less than what they said we could, and they didn’t even factor in bonuses in comp calcs when they came up with the number… be careful, generally speaking it seemed as if everyone involved wants you to spend as much as possible.

[dignam]

Mortgage + property tax + insurance - partner's contribution =~ 18% of gross income.

[SpareChange]

My income varies a lot paycheck to paycheck. For full year 2021, when including renter's insurance and excluding 403b match, it was 12.7%. For context, I work PT and rent a small apt.

[Sandi_k]

We're currently at 21.2% of our gross income, assuming DH makes minimal income (he's coasting to retirement at this point, and has a bad back).

It would be way, way less, but we have a 15 year mortgage. I'm not a fan of mortgages in retirement.

[KathrinS]

I'm renting a place on my own in London, so it's about 25-30% (depends on the month since I am self-employed). At the moment, it's worth it to me because having a nice place to live with outdoor space is valuable for my wellbeing. Also, working from home means I spend a lot of time there.

Fortunately, the rest of my life is very cheap, so I am still able to maintain a 60%+ savings rate.

[simonsez]

PI=$660
TI=$385
PI+TI=$1045
PITI*12 mo=$12,540

Inc1=$121k
Inc2=$52k

12540/173000=7.2%

[joemandadman189]

We currently are ~9.5% for Gross and ~18.5% Net - these were both higher at time of purchase 3.5-4 years ago

i couldn't imagine using the 28% or less of gross monthly income rule of thumb for housing - that would be 55% of our current monthly Net income and 3x what we paid for our current house

[Bartlebooth]

Bought a foreclosed house and was able to pay cash so no principle/interest, but have been plowing money into repairs/renovations over the past year. So about 50% of income this year, but technically I don't see any "R"s in "PITI", nor "M"s for maintenance!

Taxes are $2,000 and insurance $1,200 per year, so about 3-4% of income.  I should get the next 5 years with no taxes as a part of a relief program tied to doing a substantial amount of improvements, so insurance will be the only thing.  I'll be looking at 1% then.

[FIPurpose]

Just bought a house, (and something on the higher end too) so ours is increasing from 13% to about 29%. I won't lie. It makes me a little nervous, but I'm thinking that we'll be holding onto it for at least 10 years. And we got a decent 30-year rate on it of 4.25. I'm hoping a good raise this summer that might bring it down to the ~26% range.

I guess I need to start tracking donations next year. I might actually hit the standard deduction next year.

[ducky19]

Just a hair over 10% if you include all gross incomes, around 20% if I'm only looking at my net paycheck (excluding DW, side gigs, rentals, etc.).

[wageslave23]

About 10%. I think it all depends on what life stage and specifics to your particular situation.  DINKS with college degrees and own their own home should be 10% or less. If you have a large family it's worth it to spend a higher percentage on housing. If you only have a high-school education and a lower income job then you are probably going to have to pay closer to 50% of your income for somewhere safe for your family.

[vand]

I'm a UK borrower.

We have borrowed about x3 joint gross income (inc all bonuses, pension & overtime etc) on a 3yr discount rate of 1.38%. We have 2/3rd borrowed on an interest only basis and 1/3 borrowed on a repayment basis.

In terms of mortgage interest 4.3% of our household gross go towards. When we come to refinance at the end of next year that will probably go up as interest rates have gone up, but it should still be a very manageable number.

An additional 3% goes directly towards the 1/3 capital repayment part, and we expect our invested assets to be able to pay off the remaining capital at some distant point in the future. No hurry for that day to come - I rather like the leverage.

So about 7.3% of gross if you just count payments directly towards the house. If it was a 100% repayment mortgage it would be about 13.3% of gross.

Taxes, insurance & regular maintenance probably add an additional 1.5%/yr.
Electric, Gas, Water & Internet probably another 1.5%/yr.

[Dave1442397]

We're at 14% of gross including property taxes, just over 9% not including property taxes.

[2Birds1Stone]

We rent, and our rent is inclusive of utilities.

Total is 11% of gross income.

[YttriumNitrate]

Our PITI will be just over 14% of our income, which I recently found out is well below the suggested amount that people say you should spend on housing. It is quite a bit more than we are spending now, but still well within a Mustachian amount I would think.

Much like people who suggest spending 3 months salary on an engagement ring usually stand to gain from that purchase, I've found that people who suggest spending a lot on housing usually are in a position to make more money based on higher purchase prices.

I'm at around 10-12% of gross income on PITI.

[chemistk]

Purchased last year, currently at 23%. 3.25% Interest rate, pretty satisfied with that - PMI will be shed eventually and income will rise, hopefully bringing that under 20% in a couple years.

[GuitarStv]

We paid off the house several years back . . . since then it has been well under 10% of our income.

[ChickenStash]

When I first bought this house PITI was at 18% of gross, but nowadays I'm around 10% thanks to raises and catching a refi near the bottom (2.75%). I undershot many of my peers with this place to keep the costs down, although, there are days I wish I had went a bit bigger.

[achvfi]

We are at around 10% including property taxes and home insurance. Big chunk of mortgage is actually cashed out in refi at low interest rates. Buying a home and 30 year fixed mortgage has been such a great inflation hedge for housing costs.

[Much Fishing to Do]

Wow, realized this is a blast from the past question to me as I finished paying off my mortgage about 13 years ago but definitely used to think about it.  I guess my prop taxes plus insurance is about 1% of last years income.  We've hit that point where we are replacing a lot of 20 year old furniture and appliances so thats definitely another 1% and electric probably approaching 1% as it aint cheap. 

It all kinda pales in comparison now to Health Insurance premium/health costs which is by far the big single expense, and the kids college expense would also be up there I'm sure but its all in 529s I dont really count as mine anymore.

[lutorm]

Our PITI will be just over 14% of our income, which I recently found out is well below the suggested amount that people say you should spend on housing.

That's BS. It might be below what people say you can afford to spend on housing, but what you should spend on anything is "as little as you can, and never more than you can afford"... If anyone says you should spend more of something, they're generally trying to sell you that something.

We're at 10% of gross income (not counting cap gains), it used to be even less before I went down to half time, and I'm so happy we didn't spend more on our house and saved it instead.

[katsiki]

Interesting topic.  This will vary also due to loan term.  ie 15 year will be a larger percentage in most cases.

[EarlyInJourney]

Renting in a VHCOL area, I'm paying 17% of my gross income, saving 41%. I think moving elsewhere would likely lower both of those numbers, actually...

[mountain mustache]

I am at about 20% of gross income, or 29% of net income with Principle, Interest, Insurance, Property Taxes, and PMI. I just bought in January and luckily got a 3.0% interest rate. My house appraised $13K over asking, and has gained value just in the 6 months I've owned it, so I'm hoping to get rid of that PMI sooner rather than later!

[kanga1622]

No mortgage. About 5.5% of our monthly take home covers our taxes and insurance.

[K_in_the_kitchen]

PITI was 9% before we paid off the mortgage, although it was more than that when we first got the mortgage.  But other than having had a condo early in our marriage, we've stayed put in our so-called "starter" single family house.  Why move into the hills when it would mean having to drive to work?

It's 1.8% now -- that's property taxes and homeowner's insurance.

[big_owl]

0% since we paid off our properties.  I guess something like 0.1% if you include taxes and insurance. 

[nyxst]

I went from 9% (for nearly 2 decades) to 24% last summer. But, the value of my old home was higher than ever before, and the neighborhood had really gone down hill in the last few years, causing me to be concerned about safety. I was able to buy at a reasonable price and low interest (3.125)... now I'm on a cul-de-sac and my back yard borders preserved woodlands. I feel like I have hit the jackpot and it has improved my peace and mental health immeasurably! I am frugal across the boards and in normal circumstances I am still able to maintain my previous savings rate, so as bad as 24% seems, it's not always about that. The bill does not stress our budget.

[bryan995]

7.6% of household gross.

Almost wish we had borrowed more when rates were sub 3%.

[iluvzbeach]

House is paid for. Taxes & insurance are 1.6% of gross. We also save money in a sinking fund for the house, which is right at the cost of taxes & insurance, so all in we’re at 3.2% of gross for our house costs.

[davisgang90]

We are at about 20% of my pension and VA disability income. This is our bareboned budget that doesn't include drawing from our investments yet. Once we start doing that the percentage will drop.

2.25% 30 year that I have no intention of paying off early.

[EchoStache]

In our VERY low cost of living area, we were 5.7% on a 15 year fixed, which I was/am very accustomed to.  We just sold our house yesterday, netting $101,000.  This almost exactly matches 20% down + closing costs on the MUCH more expensive, new construction home in a higher(but still not VERY high) COL area.  I'm shell shocked over the difference in cost, taxes, payment, but we will be around 13% on a 30 year fixed at 4.375% when we close this coming Wednesday.  The rate sucks compared to 5 months ago but seems much better than pretty much ANY one else is offering.

Old home: bought $114,000 9 years ago.  Sold $212,000(a miracle in the shit hole town we moved from)
New home: $415,000

Upsides: new construction, hopefully, (surely?) more energy efficient.  Low/no maintenance for a while.  Gonna grab a hybrid hot water heater currently on sale for $1200, $400 rebate, $300 tax rebate..  Also going to check on solar especially since we have one EV currently.

[wageslave23]

In our VERY low cost of living area, we were 5.7% on a 15 year fixed, which I was/am very accustomed to.  We just sold our house yesterday, netting $101,000.  This almost exactly matches 20% down + closing costs on the MUCH more expensive, new construction home in a higher(but still not VERY high) COL area.  I'm shell shocked over the difference in cost, taxes, payment, but we will be around 13% on a 30 year fixed at 4.375% when we close this coming Wednesday.  The rate sucks compared to 5 months ago but seems much better than pretty much ANY one else is offering.

Old home: bought $114,000 9 years ago.  Sold $212,000(a miracle in the shit hole town we moved from)
New home: $415,000

Upsides: new construction, hopefully, (surely?) more energy efficient.  Low/no maintenance for a while.  Gonna grab a hybrid hot water heater currently on sale for $1200, $400 rebate, $300 tax rebate..  Also going to check on solar especially since we have one EV currently.

Did you pay points to get the rate that low?

[EchoStache]

Nope!

[mizzourah2006]

We are at about 6% for PITI, but we also have a 15 year note instead of a 30. So, before I refi'd to a 15 we were just under 5%.

[Laserjet3051]

Using 2021 total household gross income we were at 9.5% (PITI). 2022 gross income is expected to decrease significantly due to the sharp slow down in the housing market (which my wife's income is tied to), likely pushing us up >10% (PITI as % of gross income) when calculating for 2022. Before moving to the midwest in 2019 we were paying >30% of our gross income to PITA living in socal.  The change from >30% to 9.5% was very welcome and certainly intentional.

[Dicey]

I went from 9% (for nearly 2 decades) to 24% last summer. But, the value of my old home was higher than ever before, and the neighborhood had really gone down hill in the last few years, causing me to be concerned about safety. I was able to buy at a reasonable price and low interest (3.125)... now I'm on a cul-de-sac and my back yard borders preserved woodlands. I feel like I have hit the jackpot and it has improved my peace and mental health immeasurably! I am frugal across the boards and in normal circumstances I am still able to maintain my previous savings rate, so as bad as 24% seems, it's not always about that. The bill does not stress our budget.

Congratulations, @nyxst! I have always found threads like this incredibly frustrating. So many folks celebrate their low "stats", when they mostly live in LCOLAS. They keep their costs low easily because they have a myriad of choices. They are to be congratulated if they have selected the most affordable option in their area, but percentages don't necessarily tell the whole story.

Housing is a huge challenge when you live in a HCOLA and earn an average salary, or less. If you're frugal, you can spend far more on housing and still get to FIRE.  The housing component of my budget never fit within the "guidelines". By buying used cars, cooking my own meals, shopping CL, developing mad DIY skills, etc.,  even when my housing costs were nearly 40% of my gross, I could still live a great life and work toward my dream of freedom.

Tl;Dr: If you live in a HCOLA,  housing is more expensive. Don't beat yourself up or think that FIRE isn't possible.

To the OP: IMO, the wisest move may not be chasing the lowest statistic. Buying a single home that serves your family's short and long term needs might be the most strategic move. Buying, selling and moving is crazy expensive. Focus on buying the right house. Incomes tend to rise over time, so the percentages are going to change.

[Arbitrage]

Hmm...we rented for a long while, spending between 14-22% of our income on rent.  Then we bought our first house and PITI jumped to 27%, probably closer to 30% if you consider maintenance expenses.  That gradually decreased to about 10% / 11% as we paid some off, refinanced, and our income increased. 

Then we moved to a new house and dropped our income by half.  Back up to around 27-30% now in Coast-FIRE.

[Zikoris]

We spend 13% of our net income on rent. I don't know for gross income because I operate entirely on net and don't know what our gross income even is. Our city is considered expensive, but of course all cities have rentals at a variety of price points, so we just choose stuff at the lower end.

[Sandi_k]

Housing is a huge challenge when you live in a HCOLA and earn an average salary, or less. If you're frugal, you can spend far more on housing and still get to FIRE.  The housing component of my budget never fit within the "guidelines". By buying used cars, cooking my own meals, shopping CL, developing mad DIY skills, etc.,  even when my housing costs were nearly 40% of my gross, I could still live a great life and work toward my dream of freedom.

Tl;Dr: If you live in a HCOLA,  housing is more expensive. Don't beat yourself up or think that FIRE isn't possible.

To the OP: IMO, the wisest move may not be chasing the lowest statistic. Buying a single home that serves your family's short and long term needs might be the most strategic move. Buying, selling and moving is crazy expensive. Focus on buying the right house. Incomes tend to rise over time, so the percentages are going to change.

Amen, @Dicey. This is one reason I'm so pleased with our 21.2% figure, in a HCOLA.

Our first house, purchased in 1992, we had a combined income of $46k, and bought a $150k house. Our PITI was ~ 30% of gross income, and we rented out a room in our house in order to fund our (cheap) renovations and our IRAs. Over the years, it got incredibly cheap for us, and we used our freed-up cashflow to buy a business for DH - which generated even more cashflow.

We have always bought under guidelines, and gotten value (and gotten ahead!) by all that you mention, especially minimizing the transaction costs in buying and selling, plus "mad DIY skills." LOL! We stayed in that first house for 19 years; we've been in the "new house" for 11 (as of yesterday, our 11-year "buy-iversary!")

And I'm even happier when I realize that that figure is on a 15 year mortgage.

So yes - this stuff works if you keep an eye on the big picture. You can have a super-small percentage of income going to your PITI - but if you move every 4 years, you're wasting a lot of that effort - and money! - in transaction costs.

[Cranky]

When we bought our first house, in '95, probably 40%, and it was not an expensive house in a LCOL area. 26 years later, we had paid off the mortgage and tax + insurance was probably 4% of our post tax income.

We moved to a more expensive area, but we share a house with family. We put down most of the cost in cash, but they pay tax + insurance, so 0% of our (lower retirement) income goes to housing.

[maizefolk]

Somewhere between 6.5-9% depending on how I calculate my gross income.

But in fairness, when I bought it was on the order of 18%.

[badger1988]

Tracking back to 2011 when I started my postcollegiate career, including 1.5 years renting and 10 years in our house (paid off in 2020). Family of 5 with single income for past 7 years:

11.5 year total:
Rent: $17,513
Principal: $85,000
Interest: $10,213
Taxes: $27,635
Insurance: $5,788
Total Rent+PITI: $146,147
Total Gross Income: $1,507,956
=9.7%

2022 (Full Year Projected):
Rent: $0
Principal: $0
Interest: $0
Taxes: $2,710
Insurance: $0
2022 Rent+PITI: $2,710
2022 Gross Income: $164,566
=1.6%

[Fomerly known as something]

I’m at 24% of gross and close to 50% net on the property I bought in April.  It is actually the most I’ve budgeted for housing every, but I’m at a point where I’m close to FIRE so it’s less about the % of my income and more about what I’m willing to spend.  FIRE is in 3 years.  My housing will be 62% of my minimum dignity spend in RE, but the other 38% is sufficient for my other basic needs if it all goes to shit.

ETA:  my previous housing was generally about 15%.

[rmorris50]

7% - 10% PITI / gross income. Our gross income does fluctuate, thus the range. But we also put down 20%, and bought during the COVID crisis. House has crazily appreciated since.


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[rebel_quietude]

I'm sorry, I misread the question and now I can't seem to change my poll response. I spend >41% of spending on housing, not of income. Big difference...

[use2betrix]

Right around 7% of my gross income goes towards rent on our 4 bed/2 bath home.

It’s made more sense to rent for a long time, but getting closer to wanting to buy and between the soaring house prices and now rising interest rates, it’ll put us in a tough position.