Three viewpoints exist concerning housing affordability: that of groups like the National Association of Home Builders; that of mortgage lenders; which comb through an applicant's finances to determine how much he or she can borrow; and that of borrowers, who interpret affordability as what you can pay given your financial needs and goals.   The National Association of Home Builders determines housing affordability using three sets of numbers: the prices of all houses sold in an area during the past quarter to determine the median price, the area’s median household income as determined by the U.S. Department of Housing and Urban Development, and current mortgage rates. The group assumes that the buyer is making a 10 percent down payment and will spend no more than 28 percent of pretax income on principal, interest, taxes and insurance (PITI). Based on these numbers, NAHB determines the area’s affordability by looking at what percentage of households in the area satisfy the PITI criteria. Mortgage lenders first look at the front-end ratio, or what percentage of monthly pretax household income would go toward PITI. Next, they consider the back-end ratio, or what percentage of pretax household income is consumed by debt, including revolving debt and installment debt. Factors that work in the borrower’s favor include a down payment of 20 percent or more and a credit score above 700. Borrowers, of course, interpret affordability as what you can comfortably pay given your financial needs and goals.