If you’ve spent any time researching home affordability, you may have come across the “3-3-3 rule.” It’s a catchy shorthand, but it’s worth knowing that there are actually two different versions of it floating around — and neither one is a substitute for running your actual numbers with a lender. Here’s what each version means and how to think about using it.
Version one: the 30/30/3 affordability rule
This is the version most often used to describe how much house you can afford, and it has three parts, per real estate industry explainers including Yavapai Realty’s 2026 breakdown:
The first “30”: Keep your total housing costs — principal, interest, taxes, insurance, and any HOA fees — at or below roughly 30% of your gross monthly income.
The second “30”: Have about 30% of the home’s purchase price set aside in savings before you buy, generally thought of as a 20% down payment plus another 10% held back for closing costs and an emergency cushion.
The “3”: Aim for a purchase price around three times your annual gross household income.
As a rough example, a household earning $100,000 a year would, under this rule of thumb, target a home priced around $300,000 with housing payments capped near $2,500 a month.
Version two: the reserves-and-comparison rule
A different, also fairly common version of “3-3-3” focuses less on affordability math and more on financial cushion and decision-making, per Kris Lindahl’s explanation of the rule:
Three months of general living expenses saved as an emergency fund, separate from your home purchase funds.
Three months of housing costs — mortgage, taxes, insurance, HOA — set aside as a reserve in case of a temporary income disruption after you buy.
Compare at least three homes before making an offer, so you’re buying based on real context and value rather than a single emotional reaction to one listing.
Which version should you use?
Honestly, either one is a reasonable starting framework, and there’s nothing wrong with combining ideas from both — building in some savings cushion while also keeping your monthly payment and purchase price grounded in your actual income. What matters most is not treating either version as a hard rule. Loan programs, down payment requirements, interest rates, insurance costs (a real factor here on the Gulf Coast), and personal risk tolerance all vary widely, and a rule of thumb built for a general national audience won’t perfectly fit every household or every Florida market.
The real numbers come from a lender
Rules of thumb are useful for a first gut check, but your actual affordable range depends on your credit, debt, income documentation, the specific loan program, and current rates — all things only a mortgage lender can calculate accurately for you. If you don’t have a lender you trust yet, I’m glad to introduce you to a few reputable local options so you can compare and get real, personalized numbers before you start seriously looking.
Let’s map out what fits your situation
If you’re trying to figure out what you can realistically afford in the Palmetto or Manatee County area — and want it grounded in real numbers, not just a rule of thumb — I’m happy to help you think it through and connect you with a lender. Call or text 941-737-6562, email linda@reynoldsrealty.com, or book a time here.