Mortgage rates hit 5% this week, the highest level since February 2011, continuing a stunning ascent since the start of 2022.

The rate on the 30-year fixed mortgage jumped more than a quarter-point in a week from 4.72% last week, according to Freddie Mac. In the last five weeks alone, the rate has climbed 1.24 percentage points and is 1.89 points higher than at the end of last year.

The rapid rise in rates exacerbates an already ugly affordability crisis for homebuyers as the traditional buying season gets underway, while shutting out most homeowners from refinancing into a lower rate.

“As Americans contend with historically high inflation, the combination of rising mortgage rates, elevated home prices and tight inventory are making the pursuit of homeownership the most expensive in a generation,” said Sam Khater, Freddie Mac’s chief economist.

With rates jumping, potential homebuyers are seeking other ways to afford runaway home prices, with more buyers turning to adjustable-rate mortgages.

The share of ARM applications last week hit 7.4%, the highest share since June 2019, according to the Mortgage Bankers Association survey for the week ending April 8. Government-backed loans favored by first-time buyers and which require smaller down payments also saw an uptick.

“In a promising sign of strong purchase demand amidst affordability challenges, both conventional and government purchase applications increased,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting.

At the same time that buyers scramble to afford to purchase, they are watching their budgets shrink as they contend with 40-year high inflation, including rising rental affordability challenges. Rental prices grew approximately 20% from March 2020 to March 2022, according to Realtor.com's monthly rental report.

“Higher costs and declining real wages weigh heavily on people contemplating housing choices this spring," said George Ratiu, Realtor.com manager of economic research. “For now, many first-time buyers are still feeling the sting of sticker shock, with the mortgage payment for a median-priced home running $530 above a year ago, adding over $6,300 to the annual housing budget.”