Fact Check Finance: Should Housing Costs be 30 Percent of Your Gross Income?

30 percent of gross income
The unwritten rule is that your housing costs should not exceed 30 percent (sometimes 28 percent) of your gross income. Historically, expenses any higher than this indicated a cost burden and lack of affordability. Although widely used for decades, the rate may be unrealistic in this day and age. Gross vs. Net My first issue with the practice is the use of gross income. Gross income is your pay before...
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