According to a news release posted in mid-March, 2009 by the U.S. Department of Housing and Urban Development, American families spend nearly 60% of their budget on housing and transporation
. While transportation costs are a large household expense - partly due to rising fuel costs and people living in a different city than the one they work in - at most
it takes up 20-25% of a household's total expenses (leaving housing to take up the remainder of that 60% chunk)
If you take a look at the family budget calculator
on money-zine.com (which uses data from the U.S. Bureau of Labor and Statistics), the average household spends over 30% of their income on housing expenses.
When banks determine how much mortgage a household can afford, they typically assume that no more than 28 percent of a household's pre-tax income
should go towards the mortgage payment.
In other words, we spend a LOT on housing costs. The question is - do we need to?