Mortgage Rates Keep Climbing. How High Will They Get?

Will mortgage rates get much higher? Here's what borrowers will need to brace for.

Last week, mortgage rates dropped modestly. This week, they've reversed course in a very notable way. An initial rate hike by the Federal Reserve has already sent rates upward, and we could see that trend continue during the year.

Here's a summary of mortgage rates for March 18:

Data source: The Ascent's national mortgage interest rate tracking.

30-year mortgage rates

The average 30-year mortgage rate today is 4.457%, up from 4.421% yesterday. At this pace, the 30-year loan could easily reach 5% before 2022 comes to an end.

20-year mortgage rates

The average 20-year mortgage rate today is 4.146%, up from 4.136% yesterday. This is the first week this year that the 20-year loan has risen above 4%.

15-year mortgage rates

The average 15-year mortgage rate today is 3.592%, up from 3.570% yesterday. At this pace, 15-year borrowers could be looking at 4% before 2022 wraps up.

5/1 ARMs

The average 5/1 ARM rate is 3.423%, up from 3.378% yesterday. There's much savings to be reaped with a 5/1 ARM compared to the 30-year mortgage right now, but there's risk, too, given that that rate could start adjusting upward after five years.

How high will mortgage rates get?

Earlier this week, the Federal Reserve implemented its first rate hike of the year, bringing the federal funds rate up 0.25%. Meanwhile, the Fed anticipates six more rate hikes this year alone.

While the Fed doesn't set mortgage rates (or any consumer interest rates), its actions tend to dictate how mortgage rates trend. And so it's fair to assume that mortgage rates will keep climbing, partly in response to the Fed's actions during the year.

All told, there's a good chance mortgage borrowers will face some of the highest interest rates we've seen in years by the end of 2022. And so if you're in the market for a new home, now may be the time to gather offers from different mortgage lenders and lock in a loan -- before borrowing gets even more expensive.