ABC News Chief Business Correspondent Rebecca Jarvis examines if now is the time to buy, refinance or wait to buy a home.

MORTGAGE RATES SOAR TO 7.22% AFTER STRONG ECONOMIC DATA

The average rate on the popular 30-year fixed mortgage hit 7.22% on Thursday, according to Mortgage News Daily. That’s the highest point since early November.

For a homebuyer taking out a $400,000 mortgage, the monthly payment of principal and interest rose to $2,720 from $2,637 in just one week.

For sellers, higher mortgage rates have created a so-called golden handcuff effect. The vast majority of homeowners today have mortgages with interest rates below 4% or even below 3%.

“Recent data indicated that nearly 82% of home shoppers reported feeling locked-in by their existing low-rate mortgage, while around 1 in 7 homeowners without a selling plan cited their current low rate as their reason for remaining on the sidelines,” said Jiayi Xu, an economist at Realtor.com.

Because of that, there is currently a critical shortage of homes for sale, with year-to-date new listings now 20% behind last year’s pace.