Taking Chongqing City as an example, the current situation of domestic water consumption and the pricing of water resources are studied. The ability to pay the price of domestic water in Chongqing is analyzed by using the ELES model. The results show that the burden of water expenditure decreases with the increase in the urban households' disposable incomes. At the same time, the income elasticity of water demands for urban households will improve with the increase in disposable incomes. For the low-incomes urban households, the fundamental domestic water demands cannot be fulfilled. In 2016, the multistep water price was implemented in Chongqing City. The pricing of urban domestic water is basically rational, however, it has some space to be improved.