Affordable housing means more than making payments. It should not leave you paycheck to paycheck or unable to handle savings, emergencies, and routine costs.
Two common rules help gauge affordability: keep housing near 30% of gross income, or use the 28/36 guideline for housing and total debt.
The cash-flow test asks whether housing still leaves room to save consistently, fund retirement, build emergency reserves, and cover irregular bills.
The shock test checks whether finances could absorb income falling ~10% to 20%, sharply higher housing costs, or a major repair.
The stress test flags trouble if credit cards cover the month, housing drives most money decisions, or rent and mortgage cause significant anxiety.
Warning signs of being house poor include weak savings, rising credit card balances, deferred maintenance, reduced insurance coverage, and persistent housing-related stress.
Possible fixes include refinancing, cheaper insurance, checking tax assessments, renting a spare r
