Mortgage Payments as a Percentage of Income

The number of working households that spend more than half their income on rent or mortgage payments appears to be growing. 

The Center for Housing Policy issued a recent report saying that many home owners are having a hard time paying to keep a roof over their heads while still paying for other expenses. This situation may be become even harder for renters who have been seeing monthly rental payments rising because of increasing demand.

Many personal finance experts say that people should generally spend no more than 30 percent of their total income on rent or mortgage payments. The housing report estimates that approximately twenty two percent of working homeowners are spending more than 50% of their income on a place to live compared to almost twenty six percent of renters.

This trend could affect the economy in general because higher housing payments can divert disposable income which would normally be available to purchase durable goods and other items.