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Mortgage rates surged at the start of 2022 to the highest level in nearly two years as markets reacted to the news that the Federal Reserve is considering raising rates soon, according to the latest data from Freddie Mac.

The 30-year fixed-rate mortgage loan jumped to 3.22% for the week ending Jan. 6, up from 3.11% the week before. This marked the highest point since May 2020 and is also up from the same time last year, when the 30-year mortgage rate averaged 2.65%.

“Mortgage rates increased during the first week of 2022 to the highest level since May 2020 and are more than half a percent higher than January 2021,” Freddie Mac Chief Economist Sam Khater said. “With higher inflation, promising economic growth and a tight labor market, we expect rates will continue to rise. The impact of higher rates on purchase demand remains modest so far given the current first-time homebuyer growth.”