(c) 2013, The Washington Post.

(c) 2013, The Washington Post.

Mortgage rates have spiked over the past few weeks, rising at the fastest pace since 2010, sparking fears that the housing market could weaken and undermine the country's economic recovery.

In the short term, the jump in interest rates is spurring home buyers in the Washington region and other hot markets to action, adding to the already frenzied competition to get a home. But a sustained rise would hurt a fragile housing recovery, which has climbed out of the depths of its crash with the help of record-low rates, economists said.

Rates are now hovering near 4 percent, still historically low, but nearly two-thirds of a percentage point higher than last month. They have been driven up by anticipation that the Federal Reserve could soon begin scaling back its generous bond-buying program. The mortgage market is closely watching the central bank's meeting Wednesday that could determine whether rates shoot even higher.

"The biggest threat to the recovery is that rates rise too fast," said Mark Zandi, chief economist at Moody's Analytics.

Already there are signs that higher rates are becoming a drag on the housing market. Refinancing applications fell 11 percent over the past two weeks, according to the Mortgage Bankers Association. They are down 36 percent from the beginning of May.

The number of people who applied for mortgages jumped 5 percent last week, following several weeks of decline, as buyers such as Katrina Lawson clamored to lock in rates.

Lawson and her husband began searching for a home in Northern Virginia's Ashburn neighborhood in March and found that listings in their budget were often snapped up within a few days.

"There isn't time to go home and ponder," said Lawson, 32. "If you like something, you have to act fast."

When mortgage rates began to rise, the first-time home buyers realized they were running out of time. They were pre-approved for a mortgage with a 3.69 percent rate in April, but when they found a home in May, the best deal they could find was 3.87 percent.

"We're kind of bummed that we missed that window," Lawson said. "I know it's the lowest rate in years, but we definitely wanted to jump on the opportunity."

For now at least, the data still point to a solid housing recovery. Housing starts rose 6.8 percent in May, according to government data released Tuesday. That was slower than expected but still a good pace, analysts said. Home builder confidence, meanwhile, has reached a seven-year high, according to another report this week. Home prices have also risen at double-digit rates for a year, and the rate of foreclosures has begun to fall.

There is still plenty of work to be done, but the housing market is "light-years away from a few years ago," Zandi said. "We're well on our way, and housing is on the verge of a good, long run."

Low mortgage rates have played a critical part in that recovery. If the Fed allows rates to rise too quickly, it could be painful for buyers struggling to afford a home, economists said.

Rates are still far below pre-recession levels, and the 6 percent rate that would reflect a healthy economy underpinned by a strong jobs market, they said. But an increase of even a few percentage points could cost buyers thousands of dollars a year and push a purchase out of reach for others.

"A small interest-rate change has changed [buyers'] perspective," said Susan Mertz, an agent with Keller Williams Capital Properties in Virginia.

Some buyers have begun to rein in their ambitions, shooting for lower-priced homes, she said. "They're being more conservative. They're definitely trying to keep their spending power," she said.

In addition to spending $85 billion on bonds to push down long-term interest rates, the Fed has kept its benchmark short-term interest rate near zero. It has vowed to hold them there at least until the unemployment rate reaches 6.5 percent or inflation hits 2.5 percent. Most Fed officials think the first increase in its interest rate won't come until 2015.

But the markets aren't so sure. Investors have been watching for any hint of a pullback even if any actual rise in the interest rate doesn't come until much later. The suggestion alone has been enough to drive up mortgage costs.

"Everybody knows the Fed has to" pull back on its bond-buying program at some point , said Daren Blomquist, vice president of real estate research firm RealtyTrac. "It's going to be a very delicate dance for them to do that without causing some shock waves in the market."

If mortgage rates spike further, it could also complicate the housing market's other challenge: a shortage of homes for sale. In a healthy market, it would take six months to sell all of the homes on the market. According to the latest industry data, it would take only five months to exhaust the housing inventory. Buyers are rushing into the market to take advantage of low rates, but there still aren't enough sellers.

That's lucky for Scott Streicher. When he put his Burke Centre townhouse on the market in 2010, he saw little interest even after lowering the price twice to $390,000. The three-story, two-bedroom home in Fairfax County sat on the market for two months, but none of the buyers came close to meeting his listing price. Finally, Streicher pulled the home off the market, found a renter and juggled two mortgages.

Last week, Streicher decided to try his luck again. The house was snapped up for the $385,000 list price on the first day. "I could have delayed or rejected the offer and got into a bidding war," he said. "But that's greedy."