If first-time buyers were counting on home price gains to slow or flatten out as the trade-off for rising mortgage rates, they need to recalculate, some of the nation’s leading housing economists said in Denver on Friday.

“We are looking for a further crunch in affordability,” Lawrence Yun, chief economist with the National Association of Realtors, said at the National Association of Real Estate Editors’ annual conference in Denver.

Yun said builders aren’t producing enough homes to keep pace with demand in many markets, pushing up prices on existing homes. Rising interest rates add even more pressures.

CoreLogic, a real estate analytics firm, estimates U.S. home prices are 6 percent higher now than a year ago. Given higher mortgage costs, a buyer today is spending 12 percent more a month versus a year earlier for a typical house, said Frank Nothaft, chief economist with CoreLogic.

In metro Denver, home prices are up 9.3 percent, accordingly to CoreLogic, which translates into monthly payments 15 percent higher than a year ago given higher mortgage rates.

Pay raises are nowhere close to covering the gap. Metro Denver employers last year said they planned to pass on average pay increases this year of 2.8 percent, on par with the pay hikes they offered in 2016 and 2015, according to the Mountain States Employers Council.

“That is the crux of the affordability pinch,” Nothaft said.

Nothaft, who predicts mortgage rates will continue to rise in the future, points to another complication for buyers beyond bigger monthly payments.

His research shows that the inventory of homes for sale is tighter in periods of rising rates than in periods of falling rates. That’s because borrowers with a low-rate loan are less inclined to purchase a new home with more expensive debt if they don’t have to.

The higher interest rates move, the fewer homes will come onto the market, and the more competitive bidding could get for the thinner inventory.

Most borrowers have mortgages at rates below 3.75 percent, Nothaft said. FreddieMac’s weekly survey puts rates on a 30-year mortgage at 3.9 percent for the week ending June 15.

In theory, higher mortgage reduce the number of buyers who are able to afford a home, which should reduce competition and limit price appreciation. But it isn’t playing out that way.

“We are waiting for price gains to taper,” said Nela Richardson, chief economist at the Seattle-based national real estate brokerage Redfin. “There is no sense this is going away.”

The upside of higher home prices is that many owners have seen a big bump to their net worth. CoreLogic estimates Colorado homeowners have gained $24,000 in home equity on average the past year.

But rather than refinance the first lien at a higher rate, borrowers are expected to take out a home equity line of credit.

Ralph McLaughlin, chief economist with Trulia, noted that not everything is working against those priced out of the market. Rent increases are softening in many areas and could soon reverse course in some major cities.

Also, for the first time in 11 years, the country saw more new households who owned property rather than rented it. That may be a one-time blip, but it could also represent a turning in the long-running trend of declining ownership.