The cost of a mortgage just hit a new pandemic high as Americans' ability to afford a home slips further

• The average US fixed rate for a 30-year mortgage rose to 4.16% this week.
• This is the first time since May 2019 that mortgage rates have exceeded 4%.

Mortgage rates just spiked to a pandemic high — and they're only getting started.

According to Freddie Mac, the average US fixed rate for a 30-year mortgage rose to 4.16% this week. That's a notable increase from the same time period in 2021 when borrowers were offered rates as low as 3.09%. Driven by the Federal Reserve's interest rate hike, experts predict mortgage rates are likely to continue rising for the remainder of 2022.

"The Federal Reserve raising short-term rates and signaling further increases means mortgage rates should continue to rise over the course of the year," Sam Khater, Freddie Mac's Chief Economist, said in a statement.

On Wednesday, the Fed raised its benchmark interest rate for the first time since the start of the pandemic. While the intent was to cool inflation, the increase drove mortgage rates to the highest level in the last two years. As further hikes are imminent in the months to come, borrowers already grappling with housing affordability are in for a rude awakening this spring.

"As mortgage rates rise, all else held equal, house-buying power falls," Odeta Kushi, First American deputy chief economist, told Insider. "Homebuilder confidence fell in March as builders continue to face supply chain disruptions, price increases, and concerns that declining affordability will price out buyers."

Rising rates, prices prices, and few houses available

In February, the number of homes starting construction increased to the fastest pace since 2006, but supply still is not enough to meet demand and boost affordability — especially as rates tick up.

According to the US Census Bureau, housing starts rose 6.8% on a seasonally adjusted basis to a rate of 1.77 million annualized units. During the month, both single-family and multifamily starts increased 5.7% and 9.3%, respectively. Although February's increase represents the fastest growth in nearly 15 years, the housing market is still short of millions of homes.

"The number of single-family homes under construction increased to the highest level since 2006," Kushi said. "While builders are continuing to push to meet demand, supply-side headwinds slow the home-building momentum at a time when the housing market desperately needs more supply relief."

The housing market is short of about 5.24 million homes, according to the National Association of Realtors. Although home builders are working to increase inventory, supply-chain bottlenecks have slowed production and put upward pressure on home prices. As mortgage rates drive home prices higher, the National Association of Homebuilders says housing affordability has fallen to a 10-year low.

"More real estate listings are coming to the market, but that won't be able to make up for the fact that America is short millions of homes based on population needs," NAR analysts wrote. "That likely means home buyers will continue to face inventory shortages and a dearth of homes for sale in the future."

A lack of homes for sale is the last thing this year's homebuyer needs. As home prices increase from inflation and rising mortgage rates, homeownership will become even more expensive in 2022. In a housing market where the median listing price is $392,000, buyers are in for a costly Spring homebuying season.