A rule of thumb (admittedly arbitrary) for housing is to keep costs below 30% of gross income. That is why I compared median housing prices against median gross income.

If someone making the median income in a city can afford a median house with 21% of their gross income, yes, I deem that "affordable."

To go back to my example, the family making $41k net annually is paying $10,800 (ish) annually in mortgage costs. They pay an additional $4,781 in property tax annually. That leaves $25,419 annually or $2,100 monthly for other costs and savings.

My example makes plenty of assumptions that won't necessarily hold (after all, I'm assuming averages here). Notably, I'm assuming a 20% down payment and excellent credit. And no, that's not a lavish lifestyle. But it's well within the realm of "affordable" for an average person.

I'll also note that $228,000 is the median price, but a search on Zillow shows >1500 listings for less than $150,000. I saw one listing for 3bd/2ba at $135k within the loop. near decent schools and within 20 minutes driving distance of downtown, the USAA and Valero corporate campuses and the UTHSCA medical center, all major employers.

I don't really see what your example has to do with my point. Yes, Austin is more expensive than SATX. Yes, someone making $51k should not pay $1600 a month in housing cost. But you're making my point for me—housing costs in medium-large cities are not necessarily out of whack average incomes in all such cities, just some markets (like Austin).

Honest question... where does the 30% income/housing ratio come from? I always assumed it was pushed by the housing industry to "con" us into more housing than we need.

That's why I called it arbitrary.

https://www.bloomberg.com/news/articles/2014-07-17/housings-...

I was using it as a starting point.

Excellent link, thank you.

I tend to agree. The bottom line (and very obvious) is that the more spent in any one budget category, the less available for all other categories--housing included. My wife and I shoot for no more than 20% in order to ensure we can meet our other financial goals. We have paid as high as 46% (in San Diego), which simply wasn't workable.

A lot of it is enforced by landlords. Go apartment hunting, and they'll all tell you they'll only lease to you if the rent on the unit is less than 1/3 your gross income.