What Is 'House Poor'? What It Means, and Whether You're at Risk
Tai Bixby, SIOR, CCIM
Director @ Real Estate Advisors | Commercial Real Estate
By Daniel Bortz
Jan 1, 2018
What is "house poor"? This phrase describes home buyers who've purchased property they can't easily afford—and are now paying the price, as it were.
“If you can’t spend your income the way you want to because so much of it is going to housing expenses, you’re house poor,” says Debra Neiman, a financial planner at Neiman & Associates Financial Services in Arlington, MA.
Translation: If you're eating rice and beans every night just so you can pay your mortgage, you probably qualify.
As a general rule of thumb, financial advisers tell people to pay no more than 30% of their pretax income on housing—so if you make $5,000 per month, you should spend no more than $1,500 on your mortgage, property tax, and other housing costs. By that benchmark, according to the State of the Nation's Housing 2017 Report from the Joint Center for Housing Studies of Harvard University, nearly 40 million households are house poor in the U.S....
#santaferealestate