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Despite ultra-low interest rates, an analysis by Zillow indicates that homeowners paid more for their homes in the fourth quarter of 2012 compared to relative to median income levels than they did from 1985 through 1999.

This was the case for homeowners in 24 of the 30 largest metropolitan areas analyzed by real estate website Zillow, led by New York, Los Angeles and Chicago.

Zillow's chief economist, Stan Humphries, warns that historically low mortgage rates are creating the "illusion" of home affordability, especially in light of stagnant income levels. So, while people are paying more of their income for homes, in terms of real dollars they are now paying nearly 37 percent less per month compared with the pre-bubble period.

"While home values have risen over the past year, wages haven't kept pace," Humphries said.

As a result, the typical home now costs three times the median U.S. annual salary, up from 2.6 times the median annual income in the pre-bubble period. This is in light of the fact that interest rates will begin to rise in the next several years, he said.

Last Thursday, Freddie Mac said the 30-year fixed-rate mortgage averaged 3.54 percent for the week ending April 4, down from 3.57 percent the previous week and 3.98 percent last year. The 15-year fixed-rate mortgage averaged 2.74 percent, down from 2.76 percent last week and 3.21 percent a year ago.

"Once mortgage rates climb to more normal levels, housing is going to seem quite expensive again, as homebuyers will have to spend more of their incomes to buy a home. Looking forward, home values will have to either remain stagnant, while incomes catch up, or it's quite possible that some markets we could see home values declines," Humphries said.

The regions with the largest difference between their pre-bubble and fourth quarter 2012 price-income ratios included San Jose, Calif., at 52.1 percent more, Los Angeles, at 48.8 percent more, and Portland, Ore., at 45.4 percent more.