Will mortgage rates go down soon? Why did they shoot up in 2022?

As those hoping to buy a home this summer are painfully aware, mortgage rates have shot up a lot.

The average rate for a 30-year fixed-rate mortgage started off the year at a little over 3%. It's now surpassed 5%. But the Federal Reserve has only raised short-term rates once in the post-pandemic recovery — last month at one quarter of a percent. So why are mortgage rates being pushed up so much higher and faster?

"Everyone is trying to figure that out," said Carol Schleif, a Minneapolis-based investment officer with BMO.

One reason is that rates for mortgages as well as student loans, which are much longer-term kinds of debt, tend to more closely follow the market for 10-year U.S. Treasury notes.

"The Treasury market moved really rapidly to readjust to a much more hawkish Fed starting in January and February," Schleif said.

That's when Fed officials began talking more aggressively about tightening monetary policy, with more interest rates hikes this year as well as tapering its asset purchasing.

The long-term market doesn't wait for those changes to be enacted, said Greg McBride, chief financial analyst for Bankrate.com. It "tends to move well in advance of them," he said.

Rate hikes over the course of the loan are often taken into account in mortgage rates. "If you're going to invest money over 10 years, you need to look at what interest rates are going to be over the course of those 10 years, not just the next six to 12 months," McBride said.

Inflation is another big factor, he added.

"The biggest influences on long-term bonds, including mortgage rates, are the outlook for the economy and inflation," he said. "So with inflation being at a 40-year high with the Federal Reserve expected to raise interest rates repeatedly and aggressively, we've seen long-term rates move up significantly since the beginning of the year."

Jeff Tucker, Zillow's senior economist, zeroed in on the Fed's pullback of asset purchases.

Soon after the pandemic struck, the Fed began purchasing hundreds of billions of assets, including Treasury bonds and mortgage-backed securities. That helped push down mortgage rates, which provided more fuel to the booming housing market over the last year or so.

But as the economy began to heat up and prices began running hot, the Fed decided to taper back on its asset purchases and halted them altogether in March.

"So both directly by shrinking their purchases and more indirectly just by telling everyone they planned to stop purchasing and let their balance shrink, that absolutely had an effect to push up rates because one of the biggest buyers is gone from the auction room now," said Tucker.

The Fed's rate-setting Open Market Committee is expected to approve a half-percentage point rate hike at its two-day meeting that begins Tuesday.

Schleif, McBride and Tucker all were in agreement that mortgage rates shouldn't be impacted by that rate increase itself since it should already be baked into the current mortgage rates.

"I think it's already pretty well priced in," said Tucker. "But if [Fed officials] send more hawkish signals of a faster pace of hikes beyond that, that kind of thing would get the ball moving to start pricing in yet more future hikes. So that new information could further push up rates."

Schleif added that banks also know that their home equity lines and mortgage refinancing are going to start slowing down because of the higher rates. So they might try to squeeze a little more profit at a time when there's still a lot of demand in the housing market.

"I wouldn't put it past the banks to try to push rates further," she said. "It's how far can they go before the market balks. They'll watch to see what everybody else does."

Mortgage rates have been quite low since the 2008 recession. While going to 5% may seem shocking, Schleif called it more "normalized levels."

"We've all anchored to this abnormally low rate," she said. "For those of us whose first mortgage was at 12%, 5% would have seemed like a steal then. But it's all relative to what you had last year."