Mortgage rates jump to 5.78 percent, rising at the fastest pace since 1987.

Mortgages rates climbed at their fastest pace this week since 1987, as inflation re-accelerated and the Federal Reserve raised its benchmark interest rate again to try to contain it.

Rates on 30-year fixed rate mortgages averaged 5.78 percent as of June 16, according to Freddie Mac’s primary mortgage survey, up from 5.23 percent the week before — that’s the largest one-week increase in the survey in three and a half decades. Mortgage rates have jumped more than two and a half percentage points since the start of the year, while the average rate was 2.93 percent this week in 2021.

The Federal Reserve raised its benchmark rate on Wednesday by three-quarters of a percentage point, after smaller increases in March and May. Rates on 30-year fixed mortgages don’t move in tandem with the Fed’s benchmark rate but instead track the yield on 10-year Treasury bonds, which are influenced by a variety of factors, including expectations around inflation, the Fed’s actions and how investors react to all of it.

“These higher rates are the result of a shift in expectations about inflation and the course of monetary policy,” Sam Khater, chief economist at Freddie Mac, said in a statement. “Higher mortgage rates will lead to moderation from the blistering pace of housing activity that we have experienced coming out of the pandemic, ultimately resulting in a more balanced housing market.”

The climb in mortgage rates, coupled with skyrocketing home prices, has eroded what prospective home buyers can afford, increasingly pushing them out of the market altogether. There are already signs that the market is cooling.

Though mortgage purchase applications were up 6.6 percent for the week ending June 10 from the week prior, applications dropped more than 15 percent compared with the same period last year, the Mortgage Bankers Association said on Wednesday.

Joel Kan, the group’s associate vice president of economic and industry forecasting, said that “ongoing inventory shortages and affordability challenges have cooled demand, coinciding with the rapid jump in mortgage rates.”