[quote=beanmaestro]I have to admit, I don’t really follow the logic in these limits. Our expenses break down more or less as follows (well, before we bought a house)

25% taxes
35% savings
15% rent
25% other expenses

Other than not being stupid enough to grossly overpay for a house, I don’t see why we couldn’t spend 50%+ of our gross income on a house.[/quote]

Sure – you have 50% you could spend on housing (35% savings + 15% rent)… but you’re not typical.

The 45% is based on *most* people… In other words the non-piggs that don’t save 35% of their gross income. Up until very recently the savings rate in the US was actually negative (spending more than earning)… Now it’s a few percent.