The percentage of monthly income going to mortgage payments remains stubbornly high in most nation’s urban markets, according to a new industry study.
In looking at trends in 50 top market areas, the site Realtor is reporting that 47 of them are seeing mortgage payments that are above the 30% rule.
That long-time rule states simply that a homeowner is financially hard-pressed when 30% or more of the household’s monthly income goes to paying the mortgage.
In only three metro areas did the numbers come in below the 30% mark: metro Pittsburgh, metro Detroit, and larger St. Louis.
In those markets, notes the Realtor report, “home prices are low enough that a household earning the typical income could afford to purchase a home without stretching the budget beyond the recommended limit.”
Two other metro areas placed just above the 30% rule: Cleveland and Indianapolis.
Other areas appear to be entirely out of whack with that desired 30%: in metro Boston mortgage payments now equal 64% of monthly income. The New York-New Jersey area came in at almost 67%; while metro San Jose and San Diego ranged between an overwhelming 72% and 77%.
In the West, metro Denver saw mortgage payments soaking up nearly 45% of monthly income; metro Phoenix was somewhat higher at 47.8%; while Tucson came in at 46.8%.
One of the largest Western monthly payment ratios is recorded in the booming Las Vegas metro area, with a 53% rate.
What appears to be a hopeless situation for many would-be homebuyers may be somewhat alleviated, suggests the Realtor report, with an increase in wage growth. But such growth is “unlikely to keep all else equal, and would likely boost housing demand, creating conditions that would push home prices and home buying costs further.”
A likely more realistic approach? More home building. “Encouraging new-home supply and new-home construction” could help to lessen the “price pressure in tight housing markets.”
Noting that the Northeast, by way of example, is today confronted with a home supply gap – a trend that has been seen in other parts of the country – the report adds: “To remedy this challenge and provide hope to prospective buyers in the country’s most expensive markets, supply needs to increase to better match demand.”
July 8, 2025
By Garry Boulard
