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The purpose of this study was – first, to find out how to evaluate affordability of housing in the Estonian market and, second, to assess the regulatory framework decisions' impact on the housing market in Estonia.

This article seeks answers to how to define housing affordability for the Estonian housing market. It also describes the regulatory framework and policy decisions made by the government.

Calculations show that there is an affordability problem, and political decisions have helped to make housing loans affordable for households, but at the same time the high debt burden has weakened households' financial position.

It could be possible to research the market using the databases of credit institutions, but the given data is under the protection of banking confidentiality.

The HAI index, proposed by the authors, could be calculated regularly and it could be used as a possible indicator to evaluate the capability of the population to take on household loans in the Estonian household market as a whole.

The problem of housing affordability is very important for all households, and there is a need to continue with research in this field. Some households cannot buy a house, some have loan repayment problems.

No research has been done in trying to find an answer for the affordability problem in the housing market in Estonia. Also there are no analyses about the impact of the regulatory framework on the housing market – whether the government goals are achieved or not.