Mortgage rates are rising in 2022. But with rising rates scare off home buyers?

The average 30-year fixed mortgage rate jumped up again last week to 3.52%.

Last week’s jump — rising by 23 basis points — is the largest weekly increase in nearly 2 years. It’s also the third week in a row that rates increased.

The rising rates can be partly attributed to a recent surge in inflation, experts say, which new data shows hit a 40-year high in December.

The 3.52% rate has climbed back to roughly where it was before the coronavirus pandemic struck.

Higher mortgage rates might not slow the real estate market as much as one might think, especially in competitive markets like San Diego.

A recent survey of house hunters found 47% would feel an urgency to buy a home if rates rose above 3.5 percent to avoid waiting for them to rise even more.

Mortgage rates are anticipated to rise throughout the year, though not guaranteed, because of inflation and moves by the Federal Reserve.

San Diego County demand already seems to be through the roof, pushing prices to record highs, so some local real estate experts are skeptical mortgage rates might slow buyer interest.

When rates are rising, it tends to motivate people to action. People who are waiting on the sidelines for a better deal realize it is going to become more expensive to buy a house.

Not all respondents from the survey said they would feel an urgency to buy if rates rose.

While 47% of house hunters would feel an urgency to buy a home with rates going above 3.5%, around 29% said they would look in another area or seek a smaller home, and 14% would wait for rates to drop. 7% said there would be no impact.

In high-cost markets, such as San Diego, the rise in interest rates can mean significantly higher monthly costs than other parts of the nation because the median price is much higher to begin with.

Rising rates might not affect San Diego as much because some people are forgoing mortgages to stay competitive. Almost 27% of San Diego County home sales were in cash in the third quarter - the highest in seven years. Also, San Diego has higher wages than much of the U.S., so buyers may be able to absorb potential increases in payments.

The Federal Reserve signaled at its December meeting that it would dial back its economic stimulus measures as inflation rises and the job market improves.

Fed officials have indicated they will likely increase the benchmark interest rate, around zero at the moment, up to three quarter-percentage point increases in 2022.

Mortgage rates usually follow the yields on mortgage-backed securities. These bonds typically track the yield on the U.S. 10-year Treasury.