Are you spending too much of your income on rent?

Many middle-income families—40 million to be exact—are spending more than a third of their income on housing costs. The general recommendation is to spend no more than 30 percent of your gross monthly income (before taxes) on rent, yet more than 21 million renters do so according to the State of the Nation’s Housing Report.

Middle-income renters are in a tight spot

According to the report, last year marked the largest single-year jump in new renter households, yet developers are primarily catering to the more affluent renters. Plus, rental rates have risen another 2 percent in the past year. These are just a few of the reasons why the national homeownership rate is down 5 percent since its peak of 69 percent in 2004.

On a positive note, the report showed income growth picking up, especially among young adults, which could help boost savings for a down payment and ability to afford a house.

Down payment programs could help

With interest rates still at historic lows, the biggest game changer for many would-be homebuyers will be finding a homeownership program that can help with down payment and closing costs or provide long-term tax credits.

In a recent Genworth Mortgage Insurance survey, 64 percent of mortgage lenders cited lack of a down payment as the top obstacle for today’s buyers. Lenders are looking for alternative solutions to meet the growing consumer demand for affordable products. There are more and more low down payment mortgage options available today and many of them can be paired with additional homeownership programs.

Before you begin touring homes, first find out what programs may be a fit for your situation. The Down Payment Resource program search can show you your options in just minutes. Email the results to yourself and then connect with a homeownership counselor, housing finance agency, Realtor or lender to take the next step.