Mortgage rates surge to highest in more than two decades

The higher rates have made it more expensive for the typical American to buy a new home — sometimes adding hundreds of dollars to a homeowner’s monthly payment.

Calculate how much more mortgages will cost as interest rates rise

Housing prices have remained elevated even as buying activity has slowed down. And buyers still face a competitive market with a dearth of affordable homes in many parts of the country. At the same time, homeowners who are locked into the lower rates are reluctant to leave.

“Demand has been impacted by affordability head winds, but low inventory remains the root cause of stalling home sales,” said Sam Khater, Freddie Mac’s chief economist.

It’s unclear whether the Fed will keep raising rates or how long they will stay at their elevated level.

Jeff Ostrowski, an analyst at Bankrate, suggested that home buyers should not give up hope, pointing out that rates climbed as high as 18 percent in the 1980s.

“High rates are challenging for home buyers, but it’s worth noting that Americans bought homes before the recent era of super low rates,” Ostrowski said.