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Risky Business

“Mortgage payments for a new purchaser of a median-priced existing single-family home was equal to 51% of disposable income in February, down from the recent peak of 55% in October but significantly above the 30-to-35% during the pre-Covid era.”

(Pantheon Macroeconomics, via Carl Quintanilla, CNBC Journalist and Anchor)

Putting over 50% of your available income on housing is problematic because it leaves you with little financial flexibility and makes you vulnerable to unexpected events or emergencies. It's the equivalent of having an investment portfolio that is not diversified and is overly reliant on one company.


Diversification is key. Relying heavily on housing can be risky. Here’s why:


  1. Limited Savings If you spend more than half of your income on housing, you’ll have very little left to save for emergencies or long-term goals. This leaves you vulnerable to financial shocks, such as job loss, unexpected medical expenses, or car repairs.

  2. Reduced Investment Opportunities Spending most of your income on housing means you won’t have the funds to invest in other assets like stocks, bonds, or mutual funds. This can limit your overall financial growth and potentially prevent you from building wealth over time.

  3. Extended Risk When you put all your money into housing expenses, you're not diversifying your portfolio. This can be problematic because if the housing market experiences a downturn, you could face a significant financial loss.

Bonus Reason: Limited Mobility If you spend a large portion of your income on housing, you may find it difficult to move to a new location or take advantage of job opportunities that require relocation. This can limit your career growth and earning potential.


Putting over 50% of your available income on housing is a risky financial decision that limits your financial flexibility, reduces investment opportunities, and leaves you vulnerable to unexpected events. It's important to balance your housing expenses and other financial goals to ensure long-term financial stability. That means shifting the risk to someone who is willing and able to hold it. It’s also the key to creating the much needed change and innovation in the housing market.

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