What is your recommended “housing affordability” methodology? Why?
I’ve seen:
-Buy a home 3x your salary
-28/36 rule: monthly home expenses cannot exceed 28% gross monthly AND monthly total household debt cannot exceed 36% gross monthly
-50/30/20 rule: 50% on needs, 30% on wants, and 20% savings/paying off debt

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Personally, I wouldn’t be too comfortable if my house payment was anything more than 33% of my take-home paycheck. That’s where it leaves enough room to feel comfortable, even when bad things happen: lost jobs, pay decrease (temporarily during Covid), etc.

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28% is probably difficult for housing in HCOL areas.

My methodology is to assume that childcare, if needed, will cost an additional mortgage and to also assume that for any rental property tenants may also not reliably pay rent…. So personal residence mortgage should be cheap enough for you to comfortably afford 3….

Seriously, this is what we did, so we capped our mortgage at something like 20% of monthly income. We are in suburbs of HCOL area.

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