US Economic Observations: January 2018

It is well known that there are issues in the home purchase market, but there is less information on the single-family rental market, which makes up one-half of residential rentals. The CoreLogic Single Family Rental Index reflects rents paid on single-family houses and condos, and using this index we can dissect rent growth by both price tier and metro area.

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Figure 1 shows the 12-month change in our national rental index from 2005 to today. Rents for single-family fell during the Great Recession but then bounced back strongly from their low point in mid-2009 and have been trending up, mirroring home price growth. In October 2017, the index measured rent growth of 2.7 percent from a year ago. We can also show rent changes for the high-end (those rents 25 percent or more above the median rent in that market) and the low end (those rents 25 percent or less below the median in that market). The low-end single-family rental tier lagged the high-end tier from mid-2009 to early 2014, but then the low-end began steadily outpacing the high-end and the difference is growing. This mirrors the same high demand, low- supply forces that have caused low-end home prices to outpace high-end prices, as evidenced by shorter days-on-market and tighter inventory for low-end homes. Investors who entered the market to buy up distressed properties during the housing crisis might be exacerbating this trend in the rental market. High-end rents increased 2 percent in October from a year ago, while low-end rents increased by more than twice as much – 4.2 percent.

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We can also look at the difference between low-end and high-end rent growth by metro area. Figure 2 shows that low-end rents have been increasing in the largest 20 markets, with Seattle leading the large metros with the biggest increase in rents at 7.9 percent in October. Austin had the smallest increase in low-end rents of the large metros. In most of the 20 markets shown in the chart, low-end rents are increasing faster than high-end rents, and the trend is happening all over the country, not just in one region. The one exception is Warren, Mich., where low-end and high-end rents are increasing at about the same rate. The biggest spread in low-end and high-end rent increases was in Charlotte, N.C., where the low-end increased 5.6 percent and the high-end showed no increase.

The single-family rental market is an important and often overlooked segment of the and is affected by rising demand and constrained supply just like the rest of the housing market. The demand and supply pressures are especially apparent for lower-cost homes, for which rents are increasing at a much faster rate than for higher-cost homes

February 06, 2018, Irvine, Calif. –

  • Largest Price Gains During 2017 Were in California, Idaho, Nevada, Utah and Washington
  • Affordability Continues to Erode, Especially in Low-Price Range
  • Home Prices Projected to Increase by 4.3 Percent by December 2018

CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, today released its CoreLogic Home Price Index (HPI) and HPI Forecast for December 2017, which shows home prices are up both year over year and month over month. Home prices nationally increased year over year by 6.6 percent from December 2016 to December 2017, and on a month-over-month basis home prices increased by 0.5 percent in December 2017 compared with November 2017,* according to the CoreLogic HPI.

Looking ahead, the CoreLogic HPI Forecast indicates that home prices will increase by 4.3 percent on a year-over-year basis from December 2017 to December 2018, and on a month-over-month basis home prices are expected to decrease by 0.4 percent from December 2017 to January 2018. The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

“The number of homes has remained very low,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Job growth lowered the unemployment rate to 4.1 percent by year’s end, the lowest level in 17 years. Rising income and consumer confidence has increased the number of prospective homebuyers. The net result of rising demand and limited for-sale inventory is a continued appreciation in home prices.”

According to CoreLogic Market Condition Indicators (MCI) data, an analysis of housing values in the country’s 100 largest metropolitan areas based on housing stock, 35 percent of metropolitan areas have an overvalued housing market as of December 2017. The MCI analysis categorizes home prices in individual markets as undervalued, at value or overvalued by comparing home prices to their long-run, sustainable levels, which are supported by local market fundamentals such as disposable income. Also, as of December, 28 percent of the top 100 metropolitan areas were undervalued and 37 percent were at value. When looking at only the top 50 markets based on housing stock, 48 percent were overvalued, 14 percent were undervalued and 38 percent were at value. The MCI analysis defines an overvalued housing market as one in which home prices are at least 10 percent higher than the long-term, sustainable level, while an undervalued housing market is one in which home prices are at least 10 percent below the sustainable level.

“Home prices continue to rise as a result of aggressive monetary policy, the economic and jobs recovery and a lack of housing stock. The largest price gains during 2017 were in five Western states: California, Idaho, Nevada, Utah and Washington,” said Frank Martell, president and CEO of CoreLogic. “As home prices and the cost of originating loans rise, affordability continues to erode, making it more challenging for both first time buyers and moderate-income families to buy. At this point, we estimate that more than one-third of the 100 largest metropolitan areas are overvalued.”

*November 2017 data was revised. Revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results.


The CoreLogic HPI is built on industry-leading public record, servicing and securities real-estate databases and incorporates more than 40 years of repeat-sales transactions for analyzing home price trends. Generally released on the first Tuesday of each month with an average five-week lag, the CoreLogic HPI is designed to provide an early indication of home price trends by market segment and for the “Single-Family Combined” tier representing the most comprehensive set of properties, including all sales for single-family attached and single-family detached properties. The indexes are fully revised with each release and employ techniques to signal turning points sooner. The CoreLogic HPI provides measures for multiple market segments, referred to as tiers, based on property type, price, time between sales, loan type (conforming vs. non-conforming) and distressed sales. Broad national coverage is available from the national level down to ZIP Code, including non-disclosure states.

CoreLogic HPI Forecasts are based on a two-stage, error-correction econometric model that combines the equilibrium home price—as a function of real disposable income per capita—with short-run fluctuations caused by market momentum, mean-reversion, and exogenous economic shocks like changes in the unemployment rate. With a 30-year forecast horizon, CoreLogic HPI Forecasts project CoreLogic HPI levels for two tiers—“Single-Family Combined” (both attached and detached) and “Single-Family Combined Excluding Distressed Sales.” As a companion to the CoreLogic HPI Forecasts, Stress-Testing Scenarios align with Comprehensive Capital Analysis and Review (CCAR) national scenarios to project five years of home prices under baseline, adverse and severely adverse scenarios at state, Core Based Statistical Area (CBSA) and ZIP Code levels. The forecast accuracy represents a 95-percent statistical confidence interval with a +/- 2.0 percent margin of error for the index.

Inventory Shortage at Crisis Levels in Nation’s Hottest Housing Markets

For-sale inventory is stuck at crisis levels in some of the nation’s hottest housing markets where home values are appreciating fastest. The number of homes for sale nationwide has declined on an annual basis for the past 35 straight months, and just 16.7 percent of a panel of housing expertsii surveyed in December 2017 expect a meaningful increase of home building in 2018, a sign that limited inventory could continue to drive the housing market this year.


“Tight inventory fueled by a tight labor market and low interest rates propelled home values to record heights in 2017, but the outlook is now much less certain,” said Zillow senior economist Aaron Terrazas. “Tax reform will put more money in the pocket of the typical buyer, but will limit some housing-specific deductions. Overall, this should increase demand for the most affordable and ease competition somewhat in the priciest market segments. On the supply side, the market is starving for new homes, but it won’t be easy for builders struggling with high and rising land, labor and lumber costs. Aging millennials and young families may be able to find more affordable new homes this year, but they’ll most likely be in further-flung suburbs with more grueling commutes to urban job centers.”

Lack of inventory, coupled with strong demand from home buyers, is one reason why home values across the country are reaching new peaks. The median U.S. home value rose 6.5 percent over the past year to $206,300, the highest it has ever been.


Housing Forecast 2018-2019: Declining New Demand

Take a step back from whatever data you normally look at. We’ll begin big picture with how many housing units are needed to accommodate changes in the United States. By housing units, I’m including single family dwellings, apartments and condos, as well as mobile . This is the key to a housing forecast, after which it makes sense to think about construction by different types, home prices and rental vacancy rates. We’ll keep this analysis at the national level; you can use the same logic to look at your own state or metropolitan area.

Dr. Bill Conerly; historical data from Census Bureau

Drivers of growth are population, changes in household size, and pent-up demand. Population growth is the biggest factor, so let’s start there. The surprising news is how soft population growth has been in recent years. Last year’s increase of 0.7 percent was the lowest percentage gain since 1937. For the 20 years prior to the last recession, growth averaged 1.2 percent. That may seem close to 0.7, but most housing is built for new demand, not as replacement. At 0.7 percent growth, new demand is just 58 percent of what it would be at 1.2 percent population growth. That tells us that we need to forget old averages, like housing starts of 1.5 million units a year. Let’s assume that next year is like last year. Population will grow by about 2.278 million people.


The second driver of housing demand is reduction of average size of households. When a couple split up and each get their own home, that increases demand for housing. (Recall that we include apartments when we use the word “housing.”) In the opposite direction, when a young adult gives up an apartment to move back home with the parents, demand for housing decreases. We can measure this by average size of a household. When average size (number of people) goes down, demand for housing is going up.

Despite the meme about young adults living in their parents’ basements, the average household size is now lower than before the recession. (In 2006, average was 2.57 people per household; most recently 2.53.) If average household size levels out, we’ll have about 0.881 million new households. But if the recent downward trend continues, we’ll have 1.183 million. That’s a pretty big swing, so household size is a large driver of housing demand.

The ability to live on one’s own, whether that means moving out from parents or from an ex-spouse, ties to employment and wage rates. As we noted in our article on the consumer spending forecast, job growth has been moderately slow, and wage inflation has not accelerated. I expect wage rates to improve next year, but not soon enough to change the trend in household size. So new demand for housing units will be (under these assumptions) 1.183 million units. For comparison purposes, so far this year we are on pace to build 1.287 million single family houses, apartment and condo units, and manufactured homes. Looks like we’re building too much, at least nationwide.

Will pent-up demand take up some of these homes? I look at how many vacant housing unitsthere are. Some vacancy is normal and even good. For non-rental housing (mostly single family homes, but also some condos), average vacancy is 1.4 percent. In the recession, vacancy hit 2.9 percent, but most recently was down to 1.5 percent. So supply is not tighter than normal despite talk of another housing bubble.

On the rental side (mostly apartments but some single family homes included), average is 7.0 percent but we are now at 7.3 percent (down from 11.1 percent in the recession). The underlying data are not terribly precise, but we’re certainly in the ballpark of normal vacancy. This looks to me like we do not have too much or too little inventory relative to demand. (Note that some real estate analysts use the word “inventory” to describe the number of houses listed with real estate agents. That is not at all a measure of inventory or supply.)

A few points makes the analysis a little more difficult. These are national data. While people are mobile, most housing is not. An excess of houses in Detroit or Cleveland cannot help people moving to Utah or Florida. We also don’t count demolitions or houses left permanently vacant very well, nor do we have a solid handle on vacation homes.

Nonetheless, I’m comfortable saying that we don’t need an increase in home construction, and would be just fine with a five percent reduction in housing starts next year and in 2019, which is my forecast.

Given that both owned and rental vacancy rates are about normal, do we need to change the mix of single family and multifamily construction? For most of the 1990s and 2000s about 80 percent of new construction were single family units; that figure is down to around 65 percent now. With millennials entering their child-rearing ages, we should see greater demand for suburban houses and less demand for urban apartments and condos, as I argued in my Multi-Family Real Estate Forecast: 2014-2020.

As for home pricing, if we’re currently building more houses than we need, then prices don’t need to firm up. I expect long-term interest rates to rise a little, which won’t help prices. Although there’s not much reason to expect a collapse, the recent six percent nationwide price increase seems a bit much given the demographics. I would think that three percent would be more realistic.

This national picture may not apply to your neighborhood at all. Real estate is local, so look at your community. Begin with population data. (Household data are harder to find at the local level.) Understand your own community by looking at historic data on housing units permittedper 100 new residents. Don’t be too swayed by local gossip. Instead, begin with demographics.

Cities Higher at Risk for Bubble


Are we in a housing bubble? Whenever house prices increase faster than general inflation for a year or two, we hear that question more often. Can the market sustain the new higher price, or has something artificially or temporarily inflated these prices?

Nationally, over the past five years, the increase in house prices has outpaced inflation by 34 percent cumulatively since 2012 (figure 1). Though noteworthy, the increase is less than half the pace seen between 1997 and 2006, which saw house price growth outpace inflation by 87 percent.

Locally, there are areas of concern

Of course, real estate is local, so we should also ask if there are any regional housing bubbles. We examined the same two key factors to measure the likelihood that a metropolitan statistical area (MSA) is in a bubble, and we offer a method that ranks the largest MSAs against each other based on these factors.

We began with the 37 largest MSAs and looked at the real increase in house prices since their lowest point following the crisis (the trough) and our measure. We then sum the rankings and re-rank the MSAs most likely to be in a bubble, our “bubble watch” rank.

The top 10 MSAs are ranked high on both home price growth and lack of affordability measures. But further down the list, the rank could be driven by one measure or the other.

How Irma will affect real estate market

Like it did to everything else in Northeast Florida, Hurricane Irma dealt a significant impact to the residential real estate market.

But, like much else, it will come back, according to real estate professionals who’ve weathered the storms for years.

Bill Watson, founder and chairman of Watson Realty Corp., said the local effects of the hurricane began Sept. 8 for his 1,600 employees in 43 offices in North and Central Florida and South Georgia. That was two days before the storm made landfall in the Florida Keys.

“The first phase is when the hurricane warning comes. When the schools close, that affects your workforce,” he said.

Most Realtors are independent contractors and when schools are closed by an approaching storm, they take care of their children and families, Watson said.

After Irma, it was time to assess the damage on the personal and corporate levels and return to work. For many, that began about 12 hours after the storm left the area.

“We reopened Tuesday at noon. Two agents took clients to see houses and we also closed two contracts on Wednesday,” said Sherry Davidson, co-founder of Davidson Realty, which has offices in Jacksonville Beach and St. Augustine.

Linda Sherrer, CEO and president of Berkshire Hathaway Home Services Florida Network Realty, said five of her firm’s eight offices opened Tuesday, followed by the other three on Wednesday when power was restored to those locations.

The first step was to determine if properties had been damaged.

“Our agents started calling all of their listings and all of their buyers,” Sherrer said.

The post-storm phase brings its own challenges that involve title companies and lenders.

Unless a contract was executed, lenders won’t fund the loan until the home is inspected to determine whether the property was damaged. That will probably mean adding about a week or 10 days to the process, Davidson said.

Watson said damage to a property that’s under contract doesn’t necessarily void a sale, provided repairs can be completed within a set time.

“You have 10 days to determine whether the damage is minor and if so, the seller has to notify the buyer,” he said. “If the damage is minor, the seller has 30 days to repair it.”

If the damage is more than what’s considered minor — about 3 percent of the value — the buyer has the option to continue to closing or walk away from the contract, Watson said.

After the initial disruption, the market will return to its previous level, said Sherrer, who has been selling real estate in Northeast Florida through good weather and bad since 1979.

“We’ve got low inventory and low interest rates and demand is very strong. That points to a strong rebound,” she said.

The number of that were damaged will make the untouched properties increase in value.

“If you have an undamaged house that’s ready to move in, you’ll be able to bump up the price. There are still plenty of buyers, but not as much inventory,” Watson said.

He also said Hurricane Irma probably will change the market for the next several months.

“We’ll never get the September business back. And it probably won’t be really back in October, but November and December will be better than they should have been.”

Home sales drop—again—and will continue ‘unless supply miraculously improves’

House . Real Estate Sign in Front of a House.

After a brief improvement in June, home sales continued their downward slide in July, with buyers signing fewer contracts to purchase existing .

An index of so-called pending home sales, which represent closings one to two months from now, fell 0.8 percent compared with June, according to the National Association of Realtors. That is the fourth monthly drop in the past five months. June’s reading was also revised lower. The index is now 1.3 percent below a year ago and has fallen on an annual basis in three of the past four months.

“Buyer traffic continues to be higher than a year ago, the typical listing has gone under contract within a month since April,” said Lawrence Yun, chief economist for the Realtors. “The reality, therefore, is that sales in coming months will not break out unless supply miraculously improves. This seems unlikely given the inadequate pace of housing starts in recent months and the lack of interest from real estate investors looking to sell.”

 The supply of homes for sale at the end of July came in at 2.11 million, 9 percent lower than a year ago. That has fallen year over year for 26 consecutive months.

The housing market remains stuck in a holding pattern with little signs of breaking through. The pace of new listings is not catching up with what’s being sold at an astonishingly fast pace,” Yun added.

Closed sales to buy existing homes fell more than expected in July, with Realtors citing the lack of supply as the primary reason. Prices are also a factor though. The median price of a home sold in July hit $258,300, the highest July price on record. Mortgage rates have been falling through the summer and are now sitting at 2017 lows, but they are still slightly higher than one year ago. Rates have been so low for so long that they provide little relief from the fast-rising prices.

California, which boasts the priciest and tightest in the nation, saw sales slip across the board in July. The number of homes for sale fell yet again and prices hit decade highs.

“The San Francisco Bay Area posted modest year-over-year gains in home sales this May and June, but a tight inventory and waning affordability have taken a toll, and July 2017 sales fell to the lowest level for a July in six years,” said Andrew LePage, research analyst at CoreLogic.

Pending home sales in the Northeast fell 0.3 percent for the month and were 2.4 percent above a year ago. In the Midwest, sales decreased 0.7 percent for the month and were 2.8 percent lower than July 2016. In the South, sales declined 1.7 percent from June and were 0.2 percent below last July. In the West, sales rose 0.6 percent for the month but were 4.0 percent below a year ago.

Yun noted that national sales numbers could weaken more than expected this fall, due to the disruption in the Houston housing market from Hurricane Harvey.

Existing-Home Sales Retreat 1.8 Percent in June

Existing-Home Sales Retreat 1.8 Percent in June

WASHINGTON (July 24, 2017) — Existing-home sales slipped in June as low supply kept selling at a near record pace but ultimately ended up muting overall activity, according to the National Association of Realtors®. Only the Midwest saw an increase in sales last month.

Total existing-home sales1,, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 1.8 percent to a seasonally adjusted annual rate of 5.52 million in June from 5.62 million in May. Despite last month’s decline, June’s sales pace is 0.7 percent above a year ago, but is the second lowest of 2017 (February, 5.47 million).

Lawrence Yun, NAR chief economist, says the previous three-month lull in contract activity translated to a pullback in existing sales in June. “Closings were down in most of the country last month because interested buyers are being tripped up by supply that remains stuck at a meager level and price growth that’s straining their budget,” he said. “The demand for buying a home is as strong as it has been since before the Great Recession. Listings in the affordable price range continue to be scooped up rapidly, but the severe housing shortages inflicting many markets are keeping a large segment of would-be buyers on the sidelines.”

Added Yun, “The good news is that sales are still running slightly above last year’s pace despite these persistent market challenges.”

The median existing-home price2 for all housing types in June was $263,800, up 6.5 percent from June 2016 ($247,600). Last month’s median sales price surpasses May as the new peak and is the 64th straight month of year-over-year gains.

Total housing inventory3 at the end of June declined 0.5 percent to 1.96 million existing homes available , and is now 7.1 percent lower than a year ago (2.11 million) and has fallen year-over-year for 25 consecutive months. Unsold inventory is at a 4.3-month supply at the current sales pace, which is down from 4.6 months a year ago.

First-time buyers were 32 percent of sales in June, which is down from 33 percent both in May and a year ago. NAR’s 2016 Profile of Home Buyers and Sellers – released in late 20164 – revealed that the annual share of first-time buyers was 35 percent.

“It’s shaping up to be another year of below average sales to first-time buyers despite a healthy that continues to create jobs,” said Yun. “Worsening supply and affordability conditions in many markets have unfortunately put a temporary hold on many aspiring buyers’ dreams of owning a home this year.”

According to Freddie Mac, the average commitment rate(link is external) for a 30-year, conventional, fixed-rate mortgage declined for the third consecutive month, dipping to 3.90 percent in June from 4.01 percent in May. The average commitment rate for all of 2016 was 3.65 percent.

Properties typically stayed on the market for 28 days in June, which is up from 27 days in May but down from 34 days a year ago. Short sales were on the market the longest at a median of 102 days in June, while foreclosures sold in 57 days and non-distressed homes took 27 days. Fifty-four percent of homes sold in June were on the market for less than a month.

Inventory data from® reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in June were Seattle-Tacoma-Bellevue, Wash., 23 days; Salt Lake City, Utah, 26 days; San Jose-Sunnyvale-Santa Clara, Calif., 27 days; San Francisco-Oakland-Hayward, Calif., 29 days; and Denver-Aurora-Lakewood, Colo., at 30 days.

“Prospective buyers who postponed their home search this spring because of limited inventory may have better luck as the summer winds down,” said President William E. Brown, a Realtor® from Alamo, California. “The pool of buyers this time of year typically begins to shrink as households with children have likely closed on a home before school starts. Inventory remains extremely tight, but patience may pay off in coming months for those looking to buy.”

All-cash sales were 18 percent of transactions in June, down from 22 percent both in May and a year ago, and the lowest since June 2009 (13 percent). Individual investors, who account for many cash sales, purchased 13 percent of homes in June, down from 16 percent in May and unchanged from a year ago. Fifty-six percent of investors paid in cash in June.

Distressed sales5 – foreclosures and short sales – were 4 percent of sales in June, down from both May (5 percent) and a year ago (6 percent) and matching last September as the lowest share since NAR began tracking in October 2008. Three percent of June sales were foreclosures and 1 percent were short sales.

Single-family and Condo/Co-op Sales

Single-family home sales dipped 2.0 percent to a seasonally adjusted annual rate of 4.88 million in June from 4.98 million in May, but are still 0.6 percent above the 4.85 million pace a year ago. The median existing single-family home price was $266,200 in June, up 6.6 percent from June 2016.

Existing condominium and co-op sales were at a seasonally adjusted annual rate of 640,000 units in June (unchanged from May), and are 1.6 percent higher than a year ago. The median existing condo price was $245,900 in June, which is 6.5 percent above a year ago.

Regional Breakdown

June existing-home sales in the Northeast fell 2.6 percent to an annual rate of 760,000, but are still 1.3 percent above a year ago. The median price in the Northeast was $296,300, which is 4.1 percent above June 2016.

In the Midwest, existing-home sales rose 3.1 percent to an annual rate of 1.32 million in June (unchanged from June 2016). The median price in the Midwest was $213,000, up 7.7 percent from a year ago.

Existing-home sales in the South decreased 4.7 percent to an annual rate of 2.23 million (unchanged from a year ago). The median price in the South was $231,300, up 6.2 percent from a year ago.

Existing-home sales in the West declined 0.8 percent to an annual rate of 1.21 million in June, but remain 2.5 percent above a year ago. The median price in the West was $378,100, up 7.4 percent from June 2016.

Central Florida home sales up 8.8% in May

More and townhomes/condos sold and the median sale price increased in the Orlando-Kissimmee-Sanford area in May when compared to the year-ago period, according to the latest housing data released by Realtors. In May, 3,428 homes and 983 townhomes/condos sold in metro Orlando. The number of homes sold was up 8.8 percent from May 2016, while the number of townhomes/condos sold rose 17.6%.

Along with an increase in units sold in the Central Florida area, median sales prices also were up. Last month, the median home sale price in the area grew 7 percent to $240,788 and the median townhome/condo sale price increased 12.1 percent to $150,000.

These year over year increases are no surprise to President of the Orlando Regional Realtor Association, Bruce Elliott. “Orlando has strong job growth and a great quality of life that makes this area a great place to live. There have been a lot of third-party sources, from Forbes magazine to WalletHub, showing a variety of different statistics about how good Orlando is.”

Along with higher numbers in metro Orlando, the state also saw an increase in the number of homes and townhomes/condos sold in last month when compared to May 2016.

“Closed sales of existing homes in the Sunshine State not only rebounded from a relatively flat April, they positively surged to record highs in May of 2017,” said Florida Realtors Chief Economist Brad O’Connor. “To be more specific, May’s sale totals of 27,850 existing single-family homes and 11,538 existing condos and townhomes were the most ever recorded [by Florida Realtors] for a single month in either property type category. In both cases, these totals were also markedly higher than the very strong number of sales racked up in May of 2016.”

The median sale prices also rose when compared to last year. Last month, the median sale price for a home in Florida grew 7.7 percent to $239,000 and the median sale price for a townhome/condo rose 8.1 percent to $178,000 when compared to the year-ago period.

Home prices on the rise in metro Orlando

House . Real Estate Sign in Front of a House.

If you want to buy a home in metro Orlando, be prepared to spend more, according to a new Zillow report on affordability.

“Home values have soared in recent years, sending the national median as high as it’s ever been and forcing home buyers to pay more – even though their incomes do not always keep up,” Zillow’s Chief Economist Svenja Gudell said. “While low mortgage interest rates have helped keep the typically valued U.S. home affordable by historical standards, the real prices on actually available to buy is hurting affordability in many areas.”

In metro Orlando, the median list price of homes on the market was $259,900 in first-quarter 2017, which means mortgage payments would take up 23 percent of the area’s median income, compared with the 20.4 percent required between 1985-2000.

It’s also more than the 18.2 percent of the area’s median income currently required for mortgage payments for a median valued home (many of which are not for sale). Orlando’s median home value was $203,500 for first-quarter 2017, according to the report.

The median list price for a U.S. home in the first quarter was $246,900 – well above the $197,100 median home value, according to Zillow

Further, mortgage affordability in Orlando is forecast to reach between 20.7 percent to 25.6 percent of the median income, depending on if the mortgage interest rate rises to between 5 percent to 7 percent.

To see the full report, click here. (And see the slideshow for a look inside the mansion once owned by former NBA star Horace Grant, which now is back on the market.)

Kyle Swenson is a general assignment reporter.