Debunking Your Real Estate Agent’s ‘30 Percent Rule’—Americans Need to Set Aside 43 Percent of Their Income for a Home

The 30 percent rule no longer seems to work in much of the country, thanks to the post-pandemic jump in home prices.

A Bankrate analysis shows that the typical U.S. household needs to spend 43 percent of its income to buy a median-priced home of $435,000. As a result, many homebuyers are stretching their budgets further than they should to snatch their piece of the American Dream. Auris/Dreamstime/TNS

By Alex Gailey Bankrate.com

For years, the real estate industry has advised prospective homebuyers to cross off their list any home that would require them to spend more than 30 percent of their income on mortgage payments and other fees.