When Will the 30-Year Mortgage Hit 5%?

Mortgage rates keep climbing. How high will they go?

Mortgage rates have been on the rise since the start of the year. And at this point, borrowers should expect rates to keep going up.

We can thank the Federal Reserve for that. Recently, it implemented its first of several federal funds rate hikes that sent mortgage rates on an upswing. And the Fed has plans to implement several more rate hikes before 2022 comes to an end, which could lead to additional mortgage rate increases.

Here's a summary of mortgage rates for April 4:

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

30-year mortgage rates

The average 30-year mortgage rate today is 4.850%, comparable to Friday's average of 4.860%. Minor rate fluctuations like this are normal, and unfortunately, a modest drop like this doesn't indicate that rates are on their way down.

20-year mortgage rates

The average 20-year mortgage rate today is 4.521%, down from 4.549% on Friday. We could still see the 20-year loan reach 5% this year despite this small downtick.

15-year mortgage rates

The average 15-year mortgage rate today is 3.965%, up from 3.963% on Friday. We could see the 15-year loan hit 4% at some point in April at this pace.

5/1 ARMs

The average 5/1 ARM rate is 3.852%, up from 3.846% on Friday. Borrowers today can lock in lower monthly payments with a 5/1 ARM compared to a 30-year loan. But there's always the risk of that 5/1 ARM rate going up over time that buyers will need to consider.

Will the 30-year loan hit 5% soon?

Based on where mortgage rates are sitting today, it's fair to assume that the 30-year mortgage will hit 5% this year -- and possibly before the month comes to an end. And that alone could influence buyers to pull out of the market.

Granted, there's not so much difference between a 30-year loan at today's rate versus 5%. But there's something more alarming about seeing rates hit the 5% mark that could drive buyers away. If that were to happen, it could actually create a notable enough decline in demand that home prices start to come down -- something buyers very much need.

Of course, not every buyer will opt out of the market, even with borrowing rates on the rise. Those needing a home loan will need to make sure to shop around with different mortgage lenders to snag the best rate possible.