Mortgage Trends by Age Reveal if You’re Spending Too Much on Housing

A bigger yard. A real asset. A blank slate to make a place your own. Whatever your reason, buying a home is a big step—and it’s crucial that it’s not more than your budget can handle.

There are a few ways to determine whether a home purchase is affordable for you, including the 28/36 rule. Another guideline suggests that your mortgage shouldn’t be more than twice or three times your annual gross income.

So how is the typical American faring these days? Is the typical (median) mortgage affordable? Let’s see how much people are really spending on their mortgages, in total and per month.

How Much Can I Afford?

How do you know what you can afford? Using the 28/36 rule, you would first take your monthly gross income and multiply it by 28%. That’s your maximum monthly mortgage payment.

Then, take your monthly gross income and multiply it by 36%. That’s the most you should devote to your debts per month, including your mortgage and any other debts (auto loans, student loans, etc.).

Another traditional rule says your mortgage (including principal, interest, property taxes, and loan insurance) shouldn’t be more than two to three times your annual gross income. For instance, if your household brings in $150,000, your mortgage shouldn’t be more than $300,000 to $450,000.

Affordability Test: Income vs. Total Cost of Mortgage

Here’s the median gross income per person in the U.S., broken down by age.

• 16 to 24 years: $40,056 per year ($3,338 per month)
• 25 to 34 years: $59,760 per year ($4,980 per month)
• 35 to 44 years: $71,964 per year ($5,997 per month)
• 45 to 54 years: $71,544 per year ($5,962 per month)
• 55 to 64 years: $68,688 per year ($5,724 per month)
• 65 years and over: $61,992 per year ($5,166 per month)

Here’s what the spending limit would be for each age group, both for households with one working person and with two working people, if they aim to keep their mortgage borrowing to two or three times their income:

• 16 to 24 years: A mortgage that’s no more than $80,112 to $120,168 ($160,224 to $240,336 for couples)
• 25 to 34 years: A mortgage that’s no more than $119,520 to $179,280 ($239,040 to $358,560 for couples)
• 35 to 44 years: A mortgage that’s no more than $143,928 to $215,892 ($287,856 to $431,784 for couples)
• 45 to 54 years: A mortgage that’s no more than $143,088 to $214,632 ($286,176 to $429,264 for couples)
• 55 to 64 years: A mortgage that’s no more than $137,376 to $206,064 ($274,752 to $412,128 for couples)
• 65 years and over: A mortgage that’s no more than $123,984 to $185,976 ($247,968 to $371,952 for couples)

Here’s the median mortgage, broken down by generation:

The pattern is clear: the typical mortgage is out of reach for single earners at every age. Couples can afford it—except for those under 25.