In May 2024 the median home price in the United States was $439,716 with a national 30-year fixed mortgage rate of 7.10%. It would require income of $107K to afford the median priced home in the United States following the 28/36 mortgage affordability rule. The annual income required will also increase if you are not able to come up wtih the 20% down payment or $87,943 that was used in this calculation.

### What is the 28/36 Rule?

The 28/36 rule is used to helps assess home affordability with how much debt a household is able to take on. It is a ratio that is commonly used by financial institutions when providing homebuyers with mortgages.

**28:** The front-end of the ratio or the "28" is the limit as a percentage for how much of your
gross monthly income that
should go to housing costs which include your mortgage payment, property taxes, insurance and any other fees.

**36:** The back-end of the ratio or the "36" is the limit as a percentage that is placed on
your
total monthly debt
payments as a percentage of your monthly gross income.

### How much income to purchase a $500,000 home?

let's look at an example to see how much income you need to purchase a home for $500,000. For this example we will use a 30-year fixed mortgage rate of 6.95% with a down payment of 20% applied to the purchase price of the home. With the help of a mortgage calculator we can see that our monthly payment will be $2,648 or $3,048 with the addition of $325 of property taxes and $75 of homeowners insurance.

If we are not to spend more than 28% of our gross income of housing costs, to follow the 28/36 rule, we would need to make monthly income of $10,886. This means that we would have to make $130,632 anually to afford a $500,000 home. It is also important to note that additional savings will be required to pay for upfront closing costs and the down payment on the home.

The 28/36 rule also states that we should not spend more than 36% of gross monthly income on total debt. Therefore, with monthly income of $10,886 we would be limited to spending a total of $3,918 on debt each month. This means that we would have $870 a month that could be spend on debt aside from the monthly mortgage amount.

### How much house can i afford if i make $70,000 per year?

If you make $70,000 anually and keep to the 28/36 rule, you will be able to afford monthly home payments of $1,633. Since the total home you can afford is limited to the down payment you can make you can use our mortgage affordability calculator to see how much home you can afford.

Source: Redfin