CNN  — 

The days of ultra-cheap mortgages could be numbered, as rates rose back above the 3% mark last week.

The average interest rate on a 30-year fixed-rate mortgage rose to 3.05% in the week ending October 14, according to Freddie Mac, the highest rate since April. The 15-year fixed-rate mortgage rose to 2.3%.

After falling steadily during the first year of the pandemic, rates reached a record low at the beginning of 2021, with 30-year mortgages at 2.65%. They rose through the spring to as high as 3.18% in April before falling again and settling in just under 3% for most of the summer.

Now rates are expected to continue to gradually rise again, said Sam Khater, Freddie Mac’s chief economist, as inflationary pressure builds because of the ongoing pandemic and tightening monetary policy.

While rates are still historically low, home prices continue to hover near record highs.

“Many potential homebuyers are staying on the sidelines due to high home price growth,” Khater said. “Rising mortgage rates combined with growing home prices make affordability more challenging for potential homebuyers.”

Refinancing is becoming less appealing to homeowners as rates rise, with the share of refinances dropping last week according to a weekly survey from the Mortgage Bankers Association.

“We continue to expect weakening refinance activity as rates move higher and borrowers see less of a rate incentive,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.

But purchase applications went up, according to the MBA, suggesting that homebuyers are pushing on.

Financing costs remain favorable for most homebuyers, offering first-time buyers a strong incentive to keep looking, said George Ratiu,’s manager of economic research.

“Halfway through October, the number of homes for sale has improved compared to the overheated first half of this year, leading to slower price growth,” he said. “It seems that buyers and sellers are finally taking a step back from the pandemic-induced stampede of the past year to regain their footing and reassess their next steps.”