Mortgage rates hit 5.78%, the biggest weekly jump since 1987

Mortgage rates surged by more than half a percentage point this week amid rising inflation and an interest rate hike by the Federal Reserve 

Mortgage rates in the US surged the most in more than three decades, ratcheting up pressure on would-be homebuyers and cooling the housing market.

The average for a 30-year loan jumped to 5.78%, up from 5.23% last week, Freddie Mac said in a statement Thursday. That was the largest one-week increase since 1987.

Rates have risen more than two-and-a-half percentage points this year. They were at an average of 2.93% this time last year. 

"These higher rates are the result of a shift in expectations about inflation and the course of monetary policy 

At the current 30-year average, a borrower with a $300,000 mortgage would pay $1,756 a month, nearly $474 more than at the end of last year. 

A homebuyer with a $600,000 mortgage would pay more than $3,500 a month, an increase of almost $950 from the end of 2021. 

Making good on its promise to raise rates in order to stem inflation, the Federal Reserve raised the interest rate target by 75 basis points, the largest increase in nearly three decades.  

Rising rates add pressure to a housing market already stretched by home prices, which have risen swiftly throughout much of the pandemic.

Rising rates add pressure to a housing market already stretched by home prices, which have risen swiftly throughout much of the pandemic.