(WTNH) – Mortgage rates are shooting higher, but home prices aren’t going down in what continues to be a seller’s market. The last time we saw mortgage rates this high was 2009, which were nearly double what they were during the pandemic.

The increase is tacking on hundreds of dollars to monthly payments and the cost of buying a home is rising fast.

A 30-year fixed-rate mortgage now comes with an interest rate of over 5 percent, a nearly 2 percent increase from this time last year. So, now you have higher rates and more expensive homes as demand continues to get stronger.

“2020, the market just exploded. People came in from New York, we had a lot of out-of-state buyers, even people coming from Rhode Island, Massachusetts, yeah the whole nine yards,” said Lee Bar, Real Estate Agent.

Mortgage rates fell to as low as 2.69 percent during the pandemic. Lee says stimulus payments also contributed to a resurging market.

“Interest rates hit all-time lows, and when you’re handing out free money, you know, everybody is going to look to get a piece of it,” Barr said.

With interest rates back up, mortgage applications have declined as more first-time buyers get priced out of the market. Connecticut was one of 13 states that saw a more than 20 percent increase in average house prices over the past year.

Inventory for homes is still low, so when you’re going through neighborhoods, you’ll find far fewer for-sale signs. For those homes that do go on the market, we’re told the majority are being sold extremely fast.

“If your home is priced accordingly, you can expect to sell your home in the first three to five days, and honestly, your first offer will come in the first few hours,” Barr said.

For those that are buying in this market, more are turning to riskier, adjustable-rate mortgages to lock in a lower interest rate. A five-year one gets you 4.28 percent.

Experts expect mortgage rates to continue moving higher throughout the year, with the federal reserve intending to raise rates several more times this year to combat inflation.