Trulia: Buying Unaffordable Homes Isn’t Necessarily Unwise

According to Trulia, buying an unaffordable home, where mortgage payments would exceed 31 percent of a household’s income, isn’t always a bad idea.

That is because in many housing markets, workers can see strong wage and income growth, shrinking the share mortgage payments have in a household’s expenses, becoming affordable within a few years or months.

Markets where there is less risk of financial stress for homebuyers buying expensive homes include New Haven, Conn., Providence, R.I., and Newark, N.J. Meanwhile, in San Francisco, Los Angeles, and New York, home prices are high and wage growth is sluggish, and shelling out more than 31 percent on housing costs will likely be a lifetime matter.

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