How Much House Can You Afford?
Lenders use two key ratios: the 28% rule (housing costs ≤28% of gross income) and the 36% rule (total debt ≤36%). With a $100K income and 6.5% rate, you can typically afford a $350-400K home. But "can afford" and "should buy" are different — many financial advisors recommend keeping housing costs to 25% of take-home pay.
2026 Housing Market
Mortgage rates have stabilized around 6-7%. With home prices averaging $420K nationally, affordability remains challenging. Strategies: larger down payment, shorter loan terms, buying in lower-cost markets, or considering adjustable-rate mortgages if you plan to move within 5-7 years.