Existing-home sales are forecast to expand 1.7 percent in 2017, but a new housing affordability model created jointly by the National Association of Realtors suggests homebuyers at many income levels could see an inadequate amount of listings on the market within their price range in coming months.

Using data on mortgages, state-level income and listings on realtor.com, the Realtors Affordability Distribution Curve and Score is NAR and realtor.com's new ongoing monthly research designed to examine affordability conditions at different income percentiles for all active inventory on the market.

The Affordability Distribution Curve examines how many listings are affordable to those in a particular income percentile. The Affordability Score  — varying between zero and two — is a calculation that is equal to twice the area below the Affordability Distribution Curve on a graph. A score of one or higher generally suggests a market where homes for sale are more affordable to households in proportion to their income distribution.

Lawrence Yun, NAR chief economist, says a top complaint Realtors have been hearing from clients is a notable imbalance between what they can afford and what is listed for sale. "Home prices have ascended far past wage growth in much of the country in recent years because not enough homeowners are selling and homebuilders have not boosted production enough to meet rising demand," he said. "NAR and realtor.com's new affordability measure confirms that buyers aren't exaggerating about the imbalance. Amidst higher home prices and now mortgage rates, households with lower incomes have been able to afford less of all homes on the market last year and so far in 2017."

Reflecting a growing shortage of accessible inventory for most income groups, the entire Affordability Distribution Curve in January was below the equality line and the gap was generally wider at lower incomes, which indicates even tighter supply conditions. A household in the 35th percentile could afford 28 percent of all listings, a median income household (50th percentile) could afford 46 percent of listings and a household in the 75th percentile was able to afford 74 percent of active listings.

"Consistently strong job gains and a growing share of millennials entering their prime buying years is laying the foundation for robust buyer demand in 2017," said Jonathan Smoke, chief economist at realtor.com, a leading online real estate destination. "However, buyers with a lower maximum affordable price are seeing heavy competition for the fewer listings they can afford. At a time of higher borrowing costs, this situation could affect affordability even more as buyers battle for a smaller pool of homes and bid prices upward."

Calculating last month's Affordability Score — two times the area under the Affordability Distribution Curve — further highlights the disjointed rate of accessible supply on the market across the U.S. Swift price growth and higher mortgage rates caused January's Affordability Score (0.92) to shrink nationally from a year ago (0.97) and also in many states. Only 19 states had a score above one (conditions that are more favorable) and a meager three — North Dakota, Alaska and Wyoming — saw year-over-year gains in their score.

"Heading into the beginning of the spring buying season, available supply is more reachable for aspiring buyers in the upper end of the market and specifically in nearly all Midwestern states," said Smoke. "Meanwhile, many states in the West and South have seen deteriorating supply levels over the past year. Buyers in these areas should know that it may take longer to find the right home at a price they can afford."

The states last month with the highest Affordability Score were Indiana (1.23), Ohio (1.22), Iowa (1.18), Kansas (1.17), and Michigan and Missouri (both at 1.14). The states with the lowest Affordability Score were Hawaii (0.52), California (0.60), District of Columbia (0.65), and Montana and Oregon (both at 0.67).

"This shortfall of inventory at a time of healthy job gains in most states is one of the biggest reasons for the depressed share of first-time buyers and the inability for the homeownership rate to rise above its near-record low," added Yun. "The only prescription to reversing this adverse situation is to build more entry-level and mid-market housing that aligns with current household incomes."