In the second big jump of 2022, mortgage rates again rose to a high not seen since the start of the pandemic.

The 30-year fixed-rate mortgage averaged 3.45% in the week ending January 13, up from an average 3.22% the week before, according to Freddie Mac. It’s the highest the average rate has been since March 2020, when it hit 3.5%.

“Mortgage rates rose across all mortgage loan types, with the 30-year fixed-rate mortgage increasing by almost a quarter of a percent from last week,” said Sam Khater, Freddie Mac’s chief economist. “The rise in mortgage rates so far this year has not yet affected purchase demand, but given the fast pace of home price growth, it will likely dampen demand in the near future.”

The rate jump was driven by expectations that the Federal Reserve will more quickly rein in its stimulus monetary measures in response to inflation pressure, said Khater. Consumer prices rose at the fastest pace in 40 years in December.

Another reason rates are going up is that, overall, the economy is improving, said George Ratiu,’s manager of economic research.

“The mild impact of the Omicron wave, despite the high number of cases, points toward a brighter post-pandemic horizon, a sentiment which underpins a more bullish outlook on the economy,” said Ratiu.

But rising mortgage rates together with near record low inventory and higher home prices may push some buyers out of the market.

At today’s rate, buyers of a median-priced home are paying about $219 more per month than a year ago, adding over $2,600 to their yearly housing costs, Ratiu said.

“With prices for most consumer goods and services increasing, buyers are feeling the pinch on their wallets,” Ratiu said. “Affordability continues to be a central challenge for this year’s first-time buyers.”

There are also indications that some homebuyers have begun shopping earlier than the typical spring buying season, Ratiu said.

Last week, mortgage applications rose slightly from the week before, according to the Mortgage Bankers Association. Because there are so many people looking to buy a home, Joel Kan, MBA’s associate vice president of economic and industry forecasting, said he expects the number of applications for a new mortgage to remain robust.

Applications for government-backed loans – an appealing option for first-time homebuyers and those with less money for a down payment or poorer credit scores – have also increased, he said, with applications for both Federal Housing Administration (FHA) loans and VA loans up.

“The housing market started 2022 on a strong note,” Kan said. “MBA expects solid growth in purchase activity this year, as demographic drivers and the strong economy support housing demand. However, the strength in growth will be dependent on housing inventory growing more rapidly to meet demand.”