Housing has been at the crux of urban discussions all around the world. It has been always held as a parameter qualitatively as well quantitatively to define the course of development as well as the success of development of an urbanization process. Addis Ababa the capital of Ethiopia as well as the headquarters of the African union is one of the most rapidly urbanized city in the African Sub Saharan region. But housing has always been a challenge from the time of its establishment as the capital of Ethiopia. The Government of Ethiopia is always reviewing as well as revising new policies based on the context of affordable housing. But sadly to mention there is no model which describes the Ethiopian housing affordability context. This study tries to establish a theoretical model for housing affordability in Ethiopia. The study adopts case study methodology through which it establishes experience from the African counterparts to study the affordability model in African region. The study draws comparative approach testing each variables of affordability with existing data sets that are available from Ethiopian statistic agencies. The study finds out that there is a varying degree of impact of different factors such as population, family size and inflation in terms of affordability indices. Also it is clearly seen that economics plays the biggest pivotal role in affordability determination in housing supply. Also the economics is majorly impacted by number of family members with income, number of dependents, Lack of regular employment and job availability.