Chicago Tribune
September 23, 2008
More residents spending more than 35% of income on homes
From Chicago Tribune:
Soaring numbers of Chicago-area homeowners are stretched to the limit to pay their mortgages and other housing costs, newly released data from the U.S. Census Bureau show.
Spending 35 percent of monthly gross income on housing is commonly used as a threshold by financial and real estate experts to judge if homeowners will encounter difficulties paying for their residences.
Once people start spending more than 30 percent of their income on housing, they risk falling short on other expenses, said Amy Terpstra, an analyst with the Heartland Alliance Mid-America Institute on Poverty, an advocacy group.
“They have less money left over to pay for the other things they need to get by,” Terpstra said. “It’s an indicator that extends beyond folks who are officially poor, and we see the belt squeezing around people who are middle income as well.”