It is recommended that homeowners spend no more than 30% to 35% of their income on housing. This means either in rent or a mortgage payment including principal, interest, taxes and insurance.Americans Spending Half Income on Housing

The Joint Center for Housing Studies of Harvard University reported that the cost of rental housing has pressured a rising proportion of US families since the housing bust in 2007. More than one in four renters consume at least half their family income on housing and utilities.

Any more than about 30% could be a burden to some family's income. However, it's a difficult trade-off because there are daily financial dilemmas including paying rent or buying groceries.  2.3 million more families could face pressures that leave them close to being homeless.

So what is the answer to this?

If American families can pull together enough to purchase a home they would at least be building equity that they could draw from in cases of emergency. However, if the current credit limits or income levels are not adequate, this leaves families forced to rent. More than 30% of renters in states such as California, Florida and New York say that half of their income goes to housing and utilities. Average hourly wages have just over 2% in the past year according to the Labor Department but rental prices have increased nearly 4%.

Portland is also quick to follow as many people moving in and around the city are spending a lot in housing, more so in downtown where additional fees for HOA or condo association fees are required. In some cases, these can be up to 25% of their monthly mortgage payment.

This also plays a role for those that own the properties being rented. If they cannot lower their rental fees they may find themselves with vacancies leading to potential foreclosures or forced sale.

There are options and the government has programs that could be available to you in your area. It's best to talk to a reputable lender you feel comfortable with and trust when it comes to managing your housing. If you plan on buying this year, talk to your lender about how much you're currently spending and if saving for a down payment is in your future.

Call us today to learn more or to get in touch with our lender.