The 30% rule
The standard measure of housing affordability in the U.S. is 30% of gross income. HUD calls households that spend more than 30% on housing, including utilities, "cost-burdened", and more than 50% "severely cost-burdened", because it leaves too little for food, transportation and healthcare.
Maximum rent = yearly income ÷ 12 × 30% − utilities
Income needed = monthly rent × 12 ÷ 30%
Worked example
You earn $60,000 a year, or $5,000 a month. At 30% you can afford up to $1,500 a month for rent and utilities. To rent a $2,000 apartment within the guideline you'd need $80,000 a year.
Things to know
- It's a guideline, not a rule. With no debt and low other costs, a bit more can work; with high childcare or loan payments, aim lower.
- Landlords often check income. Many look for income of roughly three times the monthly rent, close to the 30% line.
- Budget the move too. A security deposit, first month's rent and moving costs come due at once.
- Check the whole budget. The 50/30/20 budget calculator shows how rent fits with everything else.
Questions people ask
Is the 30% rule based on gross or take-home pay?
Gross (before tax). On take-home pay, 30% leaves a more comfortable margin, which can suit high-cost or high-tax areas.
Should I rent or buy?
It depends on prices, rents and how long you'll stay. The rent vs buy calculator compares both paths over time.
Sources
- HUD USER: defining housing affordability (the 30% of income standard)
- HUD USER: rental burdens, rethinking affordability measures
Reviewed September 28, 2026 by The Dollars World team. How we build and check our calculators · Our data and formulas. This is general information, not financial advice.