Core Insights - The article discusses the affordability of home purchases for typical Americans, emphasizing the importance of adhering to budget guidelines like the 28/36 rule and traditional mortgage limits based on income [2][5]. Affordability Guidelines - The 28/36 rule suggests that a maximum of 28% of monthly gross income should be allocated to mortgage payments, while 36% should cover total debt obligations [4]. - Another guideline indicates that a mortgage should not exceed two to three times the annual gross income, providing specific examples for households earning $150,000 [5]. Income and Mortgage Affordability - The article provides median gross income data for different age groups, highlighting that the typical mortgage is generally only affordable for couples across all age demographics [7]. - Specific income figures are outlined for various age groups, with corresponding maximum mortgage limits based on the two to three times income rule [8][9]. Age Group Breakdown - For ages 16 to 24, the median income is $40,056, allowing for a mortgage of $80,112 to $120,168 [8]. - For ages 25 to 34, the median income is $59,760, permitting a mortgage of $119,520 to $179,280 [8]. - For ages 35 to 44, the median income is $71,964, allowing for a mortgage of $143,928 to $215,892 [8]. - For ages 45 to 54, the median income is $71,544, permitting a mortgage of $143,088 to $214,632 [9]. - For ages 55 to 64, the median income is $68,688, allowing for a mortgage of $137,376 to $206,064 [9]. - For ages 65 and over, the median income is $61,992, permitting a mortgage of $123,984 to $185,976 [9].

Core Insights - The article discusses the financial requirements and considerations for qualifying for a $500,000 mortgage, emphasizing the importance of income in determining home-buying prospects [1][5]. Mortgage Costs - The estimated monthly payment for a $500,000 mortgage, including principal, interest, taxes, and insurance, is approximately $3,669 based on national averages [2][14]. - The down payment for a $500,000 mortgage can vary, with a median down payment of 19% in 2025, equating to $95,000 [3]. - Closing costs typically range from 2% to 5% of the loan amount, resulting in costs between $10,000 and $25,000 for a $500,000 mortgage [4]. Income Requirements - The article outlines three commonly used rules to estimate the income needed for a $500,000 mortgage: the 28/36 rule, the 35/45 rule, and the 25% rule [5][6]. 28/36 Rule - Under the 28/36 rule, the front-end ratio should be 28% or less of monthly pre-tax income, while the back-end ratio should be 36% or lower. To afford a $500,000 mortgage, an estimated monthly income of about $13,100 or an annual income of $157,200 is required [7][8]. 35/45 Rule - The 35/45 rule focuses on the back-end ratio, requiring it to be 35% or less of pre-tax income and 45% or less of post-tax income. For a $500,000 mortgage, a monthly pre-tax income of just under $10,500 or an annual income of $126,000 is needed [9][10]. 25% Rule - The 25% rule considers only the front-end ratio based on post-tax income, requiring a monthly post-tax income of nearly $14,700 to afford a $500,000 mortgage [12]. Summary of Income Estimates - To afford a $500,000 mortgage, the required annual pre-tax salary ranges between $126,000 and $176,000, depending on the specific financial circumstances and mortgage type [18].

ljubaphoto / Getty Images Who can afford to buy a home these days? We run the numbers to find out. Key Takeaways To test whether a home will be affordable, you can use the 28/36 rule. Another rule of thumb is not to take out a mortgage worth more than two or three times your household income. The typical (median) mortgage today is only affordable for couples—in just about every age group. A bigger yard. A real asset. A blank slate to make a place your own. Whatever your reason, buying a home is a ...

Core Viewpoint - The proposed 50-year mortgage is seen as a significant change in the housing finance landscape, but analysts express concerns about its long-term implications for borrowers [1][2]. Group 1: Mortgage Structure and Financial Implications - Extending a traditional 30-year mortgage to 50 years could approximately double the total interest paid over the loan's life [1]. - Monthly payments could decrease by about $119, potentially increasing purchasing power by nearly $23,000, based on a median U.S. home price of $420,000 with a 12% down payment [3]. - Interest rates modeled for a 30-year mortgage are 6.33%, while for a 50-year loan, they are 6.83% [3]. Group 2: Equity and Wealth Accumulation - Buyers would accumulate equity much more slowly and remain in debt for decades longer, which could hinder long-term financial gains [3][5]. - The average first-time homebuyer is around 40 years old, suggesting many could be repaying mortgages into retirement or beyond [5]. Group 3: Market and Regulatory Considerations - Government-sponsored enterprises like Fannie Mae and Freddie Mac could potentially buy and securitize 50-year mortgages, similar to existing 30-year products [4]. - There are concerns that these loans may not qualify under Dodd-Frank rules and could carry a premium borrowing rate [4].