Housing affordability is an important concern of China, and the house price-to-income ratio (PIR) is often used as a metric for affordability. This paper builds a dynamic equilibrium model which provides testable implications for the evolution of PIR. The result suggests that PIR is an inverse measure of housing stock. The PIR is a highly persistent process because housing is highly durable. Also, since housing investment increases when the economy grows, PIR is decreasing in output. We verify these implications with Chinese data. Implications and directions for future research are also discussed.