Is It Ever OK to Spend 50% of Your Income on a Home?

For many Americans, housing is their largest monthly expense. But even so, it's important not to go overboard on housing-related spending so you have enough money left over to cover your remaining bills. Spending too much money on a home could put you at risk of falling behind on your mortgage payments and eventually losing your home to foreclosure.

As a general rule, it's a good idea to keep your monthly housing costs to 30% of your income or less. And that doesn't just mean to keep your mortgage payments to 30% of your pay or less. Rather, that 30% should include additional recurring expenses such as:

• Property taxes
• Homeowners insurance
• HOA fees, if applicable

But what if you're looking at homes in a really expensive housing market, and it's pretty much impossible to keep your housing costs to 30% of your income? Is it OK to go higher -- as high as 50%?

Generally speaking, it's not wise to commit 50% of your income to housing costs. You won't be leaving yourself with a lot of money left over for your remaining bills, so you might struggle to pay them. That could lead to costly debt in non-mortgage form, like credit card balances you have a hard time keeping up with.

However, in some cases, it may be OK to spend 50% of your income on housing. You'll just have to make sure your remaining expenses are notably low.

When you have to spend more for a home

Zillow reports that the average U.S. home value is $347,716. But in some parts of the country, that won't even buy you a closet.

Take San Francisco, where the average home value is a whopping $1,236,502. If you're buying a home in an expensive city, it may be almost impossible to keep your housing costs to 30% of your income due to the local market.

Now granted, if you're buying a home in an expensive city, then chances are, you're earning an above-average salary to compensate. But that still doesn't mean you'll manage to keep your housing costs to 30% of your income.

It's important to be realistic about your local housing market. If sticking to 30% of your income isn't feasible, it's OK to look beyond that threshold as long as you've crunched the numbers and are certain you can afford the payments you're taking on.

When you might get away with spending 50% of your pay

It's one thing to spend, say, 38% of your income on housing instead of 30% because your local market is inflated. It's another thing to spend half of your income on housing.

But again, if you're in an expensive housing market, that may be your reality. You may also be OK to spend half of your income on a home if your remaining expenses are low.

Let's say you live in a city and walk or bike almost everywhere so your transportation costs are next to nothing. AAA puts the average monthly cost of owning a car at $1,015. If you're not spending much money to get around, it gives you more leeway to spend on a home.

Similarly, let's say you're childfree and have no intention of having kids. Care.com puts the average weekly cost of daycare for an infant at $321. But if you're not paying for child care, or any expenses related to having a child, then you should be able to more comfortably spend extra on a home.

Finally, perhaps you don't tend to dine out often because you love to cook, and that your go-to entertainment is jogging at the local park or curling up with some good streaming content rather than attending concerts and going to the theater. That's a less expensive lifestyle in general, which could mean that you'll be fine spending half of your pay on a home.

Generally speaking, it's not a good idea to spend 50% of your income on housing. But that doesn't mean that it's never OK. Under the right circumstances, you can commit to that sort of housing expense without necessarily winding up in over your head.