The House Method portal presented a study where, among other results, it was found that in 48 of 50 US states, more than a third of their income is used to pay for housing, with an average of 52%.
Buying a home in the United States is becoming a challenge, especially for those who want to buy a home for the first time. Both prices and mortgage rates are through the roof. And that is reflected in the monthly payments. A new study finds that Americans spend, on average, up to 52% of their income on their mortgage payment.
The House Method portal, a specialist in the real estate market in the United States, presented a study on the average prices of homes in the US and the wages needed to pay for them. The analysis showed that the average American spends 52% of their income on their mortgage.
This result is disappointing, after specialists suggest not spending more than 30% of your income on housing expenses, including the mortgage or rent.
Recently, in Takecareofmoney.com we explained how the 28/36 rule works to pay your mortgage in the United States. This rule states that you should use no more than 28% of your gross monthly income for housing expenses and no more than 36% of your gross monthly income for all debt service, including your mortgage loan.
According to the House Method, in 48 of 50 US states, Americans spend more than a third of their monthly income on housing, that would mean spending just over 33% of a family or individual’s earnings. who buys a house.
Only two states, Alabama and Wisconsin, have mortgage rates that adhere to the 28% principle. Wisconsin homeowners typically spend about 23% of their income on monthly house payments. Alabamans barely make the cut, spending 27% on their mortgages.
The other 48 states top the percentage, with a national average of 52% of income spent on housing. Hawaiians spend the most on housing, with a whopping 139% of their income going to housing payments. Many homeowners in states like Hawaii opt for multi-family units over single-family homes in order to afford such expensive monthly payments.
The study results also showed that 70% of Americans currently cannot afford to buy a home in their state. The highest national minimum wage of $16.10 an hour is not enough to pay for a house in a regular 40-hour workweek.
According to House Method findings, the median annual income needed to purchase a home is $107,139. However, the average annual income in the United States is $60,357.
The average monthly mortgage in the US currently sits at around $2,431. To meet the 28% rule for this amount, you would need an annual salary of at least $104,000, or a monthly salary of $8,683. Right now, the average American earns around $5,030 per month.