In this paper a comparative analysis of housing affordability indicators for selected old member states of the European Union (Austria, Ireland, Spain and the United Kingdom), new member states (Bulgaria, Estonia, Poland and Slovenia) and Croatia is performed. We analyse housing affordability in the named countries and their capital cities for the period from 2000 to 2008. The housing affordability indicators based on shelter first approach and the relation between expenditures for purchasing a housing unit and income are calculated. The income is approximated by gross domestic product per capita and gross wage per employee. The affordability indicators are also corrected for the value of housing loans interest rates. The results of the analysis indicate that housing is on average less affordable in new member states and Croatia, even though house prices in old member states are considerably higher. During the 2000-2006 period all countries recorded an increase of housing affordability. This trend reversed in 2007, resulting in decreasing housing affordability in 2007 and 2008. When analysing individual countries, Bulgaria, Croatia and Estonia emerge as three countries with the least affordable housing.