Historically, monthly mortgage costs have required about 21% of a homeowner's median income. However, record low rates placed that number at just 15.7% in 2017.
Currently, rates are hovering around 4.3% for the standard, 30-year fixed rate, near historically low levels. But monthly mortgage costs already have surpassed the historic norm in seven large U.S. markets with the potential to spread to other markets.
Rates have risen almost 50 basis points since the beginning of the year, with the indication being that the upward trajectory will continue, according to Zillow's analysis.
Unaffordable housing, which is traditionally placed at anything above 30% of median household income, is most pronounced in California.
Residents in San Jose, for example, on average use about 46.1% of their median income on monthly mortgage payments. That's up from a 36% historical level for the region. Three other large California locales are seeing similar increases.
If mortgage rates reach 5% by the end of the year, 17 of the country's 35 largest markets will be less affordable than they have been historically, according to Zillow.
Another consequence of rising mortgage rates is that would-be home sellers could opt to stay in their homes instead of taking a chance on purchasing a new property. Zillow called this phenomenon the "mortgage rate lock-in," a probability that the company has expected for several years.
"This could have the effect of reducing already tight inventory levels -- and tight inventory, coupled with high demand, is one of the main drivers of currently rapid home value growth to begin with," wrote Aaron Terrazas of Zillow Research wrote.