Howdy from the Jorgenson Group—we’re here with a no-nonsense (and slightly cheeky) breakdown of the 30/30/3 rule—a home-buying roadmap that’s all about keeping your finances sane. Think of it as your home-buying GPS: three checkpoints to make sure you don’t go broke chasing your dream home.
1. Keep Housing Costs Below 30% of Income
First up: your monthly housing costs—including mortgage, taxes, insurance, and PMI—shouldn’t exceed 30% of your gross monthly income. Staying in this sweet spot leaves plenty of wiggle room for life’s essentials (like queso and road trips). That’s the real wisdom behind the rule—not just math on a page. (Source: MyHomePathway, MIDFLORIDA Credit Union)
2. Save 30% of the Home Price Before Buying
Next: stash away 30% of the home’s value before you buy. Ideally, 20% goes toward down payment to dodge PMI, and the extra 10% becomes your emergency buffer—because Austin summers are fun until the AC decides otherwise. (Source: MIDFLORIDA Credit Union, MyHomePathway)
3. Your Home Should Cost No More Than 3× Your Annual Income
Finally, the price tag: your new place shouldn't cost more than three times your gross annual income. If you're earning $100K a year, you’ll want to avoid homes over $300K—or more accurately—homes that’ll break you. Humor aside, it’s all about long-term financial comfort. (Source: CMG Financial, MIDFLORIDA Credit Union)
Why This Rule Still Packs a Punch in 2025
Sure, the classics like the 30% rule are useful—but they don’t always account for today’s wild market conditions. According to Realtor.com, 47 of the 50 largest U.S. metros now see buyers spending well beyond 30% of their income just to afford housing. That only underscores why the 30/30/3 rule can be your financial seatbelt when the market gets bumpy. (Source: Realtor.com)
The Jorgenson Group Takeaway
Here’s your bottom line: the 30/30/3 rule is all about balance—affordable payments, financial padding, and smart buying. It’s a rule born from real-life thinking, not just idealistic budgeting.
Is it absolutely mandatory? No. But treat it like friendly advice from a trusted neighbor: it can keep you grounded rather than gasping for air in a sea of homeownership regrets.
Want to see how this rule plays out in Belton, Temple, or Pflugerville? We’ll crunch the numbers, add the sass, and walk with you every step of the way. (Source: Investopedia)
