By Jonnelle Marte

(Reuters) – The U.S. mortgage rate rose to a record high of 2.2% last week. This trend could continue, which will further squeeze first-time home buyers who are struggling to make ends meet with rising housing prices and limited supply.

According to the report, rates for 30-year fixed rate mortgages averaged 3.9% in the week ended February 10, up from 3.55% last week. Freddie Mac (OTC:). Now, mortgage rates are at their highest point since January 2020. That was shortly before the pandemic.

Sam Khater (chief economist at Freddie Mac), stated in a statement that “the normalization of economic activity continues as mortgage rates jumped up to the highest levels since the emergence de la pandemic.”

As the Federal Reserve increases interest rates to counter higher inflation, mortgage rates will likely continue to rise in the months ahead. Investors are expecting that the Fed will increase rates next month by half the percentage, as Thursday’s data showed an unprecedented rise in annual inflation.

With higher borrowing costs, potential buyers could feel less optimistic about the housing market. Fannie Mae released a record low survey on Monday showing that 25% said it was a good time for them to buy a house in January.

However, home prices rose at a slower pace in the fourth quarter. A report by the National Association of Realtors released Thursday showed that the median price of single-family homes increased by 14.6% compared to 15.9% in third quarter.

Lawrence Yun of the NAR’s chief economist, stated in a statement that rising prices had taken a toll on home buyers. Many families are losing their homes, especially first-time buyers.