Affordability is affected in these markets by high costs to commute and monthly energy bills

What do you worry about? Interest rates? A big worry about interest rates going up--which they will, slowly--is that a rise in rates may push homeownership farther away from some people. If rates go up, monthly payments would spike. It stands to reason.

Today we'll learn more about how well-founded that worry is. But most likely rates will go up at some still unknown point, but not now.

And it's not accurate to assume that monthly payments must go up with each notch upward in interest rates. Sellers of houses could lower their prices. Or a crop of new houses with lower sticker prices could enter the market, offsetting the interest rate bump up with a lower principal payment on a monthly basis.

Plus, affordability is a tricky measure. It applies as a standard measure of the power to pay for something across neither time nor place. Affordability is a classic relative term. Price elasticity is a sub-subject of neuro- and behavioral economics that could merit its own four-year course of study and experiment. We describe places and time periods that are "un-affordable" and then say that every scarce unit that comes available gets scarfed up on the spot, with competing bids and over-asking-price deals. On the other hand, so-called affordable times and marketplaces may go wanting for buyers because--even at low price tags and low borrowing costs, people can't put their hands on the funds.

Plus, payment power is subjective. A household that is banking on a series of 3-to-5% annual salary-boosts over the next few years brings a different psychology to the amount they can pay monthly for housing than a household that has to mind costs because of a shift into a fixed income, or the imminent retirement of one the two earners.

Affordability is about as relative as a term can get. And, today's market, particularly in geographies that have been producing higher-paying jobs for younger adult workers, is sure proof that un-affordability, too, is elastic. It may apply in hindsight, but as long as people keep ante-ing up, it's hard to argue that it's "un-affordable." We can call it insane, but that doesn't mean it won't transact.

The problem with the terms affordable and unaffordable, I think, is that we try to apply them as history-shaped lenses into the immediate future. What they do, when they're applied that way is to expose our very human, very flawed use of measurements to guide tactics to prepare for what's coming. Practically the only time the terms affordable and unaffordable ring true is when they're applied in hindsight. We look back and explain a series of correlated or consequential events by referring to affordability.

So, it's refreshing--given that my media colleagues misuse the terms with impunity more often than not--to see earnest work on understanding truer meanings around the terms, as Trulia housing economist Ralph McLaughlin does in this take on an America's-Most-Affordable and Un-affordable Markets ranking.

McLaughlin adds to the normal measure ratios of median home price to median household income the additional real-world benchmarks of how much people pay to get to work and how much they're paying in that particular market for energy costs. He writes:

Trulia's most affordable housing markets, including commuting costs and energy expenses.

When taking into account commuting and utility costs, the share of income spent on housing and these non-housing essentials jumps significantly. For example, middle-class homebuyers in Detroit and Birmingham could spend less than 20% of their monthly income on housing if they bought a median priced home. However, the share of income jumps to nearly 40% when we factor in the median commuting and utility cost. In these two metros, the median households spend between 15-17% of their income towards non-housing essentials. Likewise in affordable Houston, the share of income spent on housing by middle-class homebuyers is a small-ish 34.9%, but jumps to over 50% when factoring in these other costs.

Principal, interests, taxes, and insurance, yes, PITI, is the numeric compound "payment" people most look at when they evaluate "payment power." Which, nowadays, is silly, because energy costs--although they're artificially depressed for the moment--are going to go up up up, and commuting costs will do the same, once the oil glut reverts to its norm of scarcer supply vs. demand.

Remember, higher interest rates don't tend--historically speaking--to stunt housing market demand. Remember, too, that signs of increasing wage power are showing up in a lot of the recent economic data. So, not only could their be lower house price points to offset higher interest rate impacts, but there also could be higher median income rates.

Affordability is relative. What's more, it's a better look-back tool than a look-around-the corner capability.