Lettered blocks spelling the word "mortgage" next to a wood outline of a home

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Home buyers this spring are facing a double whammy of rising home prices and mortgage rates. The 30-year fixed-rate mortgage rose to 4.72% this week, from 3.13% when compared to a year ago, Freddie Mac reports.

Over the last three months, mortgage rates have risen by 1.5 percentage points, the fastest three-month rise since May 1994. Also, during the first two months of 2022, home prices have climbed by more than 15% compared to a year ago, Nadia Evangelou, senior economist and director of forecasting at the National Association of REALTORS®, writes on the association’s blog.

But housing demand remains high, Evangelou says. A severe housing shortage due to underbuilding has occurred over the last decade. “Housing demand will remain strong due to favorable demographics and shifts in buyers’ preferences as teleworking remains in place,” Evangelou says.

As such, home prices are expected to rise 5.1% in 2022, according to NAR’s projections.

Buyers are weathering the higher mortgage rates for now. Mortgage rates still remain low by historical standards. A more typical historical average is 8%, according to NAR.

Freddie Mac reports the following national averages with mortgage rates for the week ending April 7:

  • 30-year fixed-rate mortgages: averaged 4.72%, with an average 0.8 point, increasing from last week’s 4.67% average. A year ago, 30-year rates averaged 3.13%.
  • 15-year fixed-rate mortgages: averaged 3.91%, with an average 0.8 point, increasing from last week’s 3.83% average. A year ago, 15-year rates averaged 2.42%.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.56%, with an average 0.3 point, rising from last week’s 3.50% average. Last year at this time, 5-year ARMs averaged 2.92%.

Freddie Mac reports points along with average commitment rates to better reflect the total upfront costs of obtaining a mortgage.