Read more: Fed interest rate hike official: reaction

The 15-year fixed-rate mortgage is now 30 basis points higher than a week ago, up to 3.39%. The five-year Treasury-indexed hybrid adjustable-rate mortgage jumped from 2.97% to 3.19%.

The spike in mortgage rates has already started to hamper mortgage application activity. According to data from the Mortgage Bankers Association, overall mortgage apps dropped 1.2% week over week, with refinance activity declining by 3% and purchase applications edging down by 1%.

“While home purchase demand has moderated, it remains competitive due to low existing inventory, suggesting high house price pressures will continue during the spring homebuying season,” Khater said.