U.S. mortgage rates rose for a fourth straight week, with higher borrowing costs threatening to crimp the housing rally.

The average for a 30-year, fixed loan was 3.05%, up from 3.02% last week and the highest since July 2, Freddie Mac data showed today. Rates have surged this year from a record low 2.65% in January.

Rates are rising as vaccines and a massive stimulus package drive a bet that inflation will accelerate as the U.S. economy picks up steam. Even with the recent spike, rates remain low by historical standards. This time last year, the average for the 30-year loan was 3.36%.

The housing rally that began last year after social-distancing initially froze the market was built on low borrowing costs. Rates dipped below 3% in July and stayed there for seven months, boosting buying power as Americans looked for larger properties in the suburbs.

With inventory of homes lacking, home prices have surged across the U.S. Still, a gradual jump in rates won’t do much to quell demand, said Mark Vitner, a senior economist at Wells Fargo Securities.

Sales will soar this year as Covid-19 infections decline and the $1.9 trillion stimulus package fires up the economy, he said.

“The record low rates are probably in the rearview mirror because they only existed at the time when the news of the pandemic was at its absolute worst,” Vitner said. “The economy is clearly on the mend so it makes perfect sense that interest rates have increased.