The Fed's next move could send 30-year mortgage rates past 8% and shake up the housing market.

The mortgage rate hasn't crested that mark since 2000. But with the current rate averaging 7.26% and the Fed hinting at another hike, experts warn 8% rates may only be a matter of time.

" If the 30-year fixed mortgage rate can hold at a high mark of 7.2% — and the 10-year yield holds at 4.2% — then this would be high for mortgage rates before retreating," said Lawrence Yun, chief economist at the National Association of Realtors (NAR).

"If it breaks this line and easily goes above 7.2%, then the mortgage rate reaches 8%."

8% rates would "freeze" the housing market

The NAR says an 8% mortgage rate could bring the housing market to a screeching halt. "At 8%, the housing market will re-freeze, with fewer buyers and far fewer sellers," Yun said.

Mortgage rates averaged 3% or less from July 2020 to November 2020 before moving closer to 7%—the national average over the past 50 years, according to Freddie Mac.

"Given that the large majority of existing mortgages have rates below 6%, there is no incentive for homeowners to refinance their existing lower-than-current-rates mortgage and enter into a new, costlier mortgage," said Joe Mellman, senior vice president at TransUnion.

Mortgage lender Freddie Mac estimates that 82% of homebuyers are currently 'locked into' their current homes because of the rates they landed just a few years ago.

Where rates go from here

While experts warn of 8% mortgage rates in the short term, housing forecasts point to a steady decline in rates for the rest of the year.

The National Association of Realtors, Fannie Mae, and the Mortgage Bankers Association all forecast rates to be near 6% by year's end and closer to 5% by the end of 2024.

But according to Yun, that's as low as rates can possibly get.

"One can never truly predict the future, but I don't see mortgage rates returning back to the 3% range in the remainder of my lifetime," Yun said.