News Number of the Day Wait, What? Mortgage Rates Really Have Jumped That Fast Number of the Day: The most relevant or interesting figure in personal finance By The Balance Editors The Balance Editors We’re a team of writers and editors with decades of experience researching and answering questions about personal finances. We believe everyone should feel confident when making money decisions, and that passion drives us to make The Balance the best place to learn about finances. learn about our editorial policies Published on March 28, 2022 That’s how few days it took for the average 30-year mortgage rate to rise more than an entire percentage point, showing how quickly things are changing for the housing market. The average interest rate offered for a 30-year fixed mortgage surged to 5.17% on March 25 from 4.16% on March 1, according to lender data provided to The Balance Monday. To put that in perspective, the average stayed in 3% territory for all of last year. This year’s rising borrowing costs—which swelled the average monthly mortgage payment on new loans by $270 even before the March spike—could be a game-changer for the pandemic-era housing market. Home sales and mortgage applications have already started to slow, and the Federal Reserve plans to keep raising its benchmark interest rate to combat inflation that hasn’t been this high in decades. Less interest from homebuyers might actually help bring some balance to real estate listings, where home sellers have held all the cards and prices have soared to record levels. Buyers saw their purchasing power bolstered when rates dropped to all-time lows early in the pandemic, but there weren’t enough homes on the market to meet the demand. (The 30-year got as low as 2.89% in December 2020, according to our data.) If the dynamic reverses course, rising rates could quash the extreme price increases as more homes come on the market. That said, there’s a risk the tables could turn too far, and prices could start to fall as the market gets flooded with homes that find no buyers, economists at ING warned in a commentary last week. Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Mortgage Bankers Association. “Mortgage Applications Decrease in Latest MBA Weekly Survey.” National Association of Realtors. “Existing-Home Sales Fade 7.2% in February.” Morning Consult. "Consumer Spending Report.” ING. “Warning Lights Start To Flash on US Housing | Article.”