Housing Consumption as multiple of income

I'll play: 3. And I'm below your definition of 'high income'.

3-4 range.

I think your multiple only works for recent purchasers. Anyone who has been in their apartment long tern it's probably higher.

We just closed on a place (woo!) and the value of my half is about 3.4x my base salary.

Not just recent purchasers..I think you need to factor in if there is financing and if so current LTV.

For the calculation, 'consumption' isn't the right term either. My place is fully paid for, so the only 'consumption' of my income is in maintenance payments. The multiple calculated is sort of meaningless, because it's comparing a balance sheet item (fixed asset value) with a cash flow (annualized income) value.

Aaron, I mean consumption in terms of not putting the property to income producing purposes. I am not talking about affordability, leverage or risky behavior. Simply $ value of residence relative to income. Some one who is retired may have a multiple of 10 or more and the residence may be paid for. The metric I am talking about will fail.

3.4

6

Probably at least 10 because of very significant appreciation over the last five years and only a modest increase in income. As others have pointed out, though, the ratio is pretty meaningless in practical terms; I have no mortgage or home equity line payments, so it's not as if I have to come up with some exorbitant percentage of my income to stay in my home.

my suspicion is that the OP has seen a decline in his income.

Anything more than 4x does sound risky, but it's obviously dependent on the nature of your income, net worth and what the bank will lend you!