As mortgage rates continue to rise, homeownership may be even further out of reach for many Americans. The upside? Competition for homes is decreasing, which could boost your chances of securing your dream home -- but it'll cost you.

Last week, the Federal Reserve raised interest rates by half a percentage point, the largest rate hike in 22 years. When interest rates increase, it also pushes up mortgage rates, making it more expensive to buy a home. As of May 11, the national average for a 30-year fixed mortgage is hovering around 5.5%, compared with last year at this time, when we saw record lows around just 3%.

Though rates are still historically low, their steady increase coupled with high home prices is putting financial pressure on buyers -- and potentially pushing some out of the market. When taking into consideration record-breaking home prices and the Fed's significant interest rate hikes, a homebuyer will pay almost 47% more for the same property compared with a year ago, according to Realtor.com.

"We're running out of precedents," Len Kiefer, Freddie Mac's deputy chief economist, told Realtor.com. "It's a real test for the market. We haven't seen anything like this speed of [mortgage] rate increases in a generation."

But there's a silver lining to rising mortgage rates: competition, which was fierce throughout the past couple of years, slows down when rates rise, and the cost of borrowing becomes more expensive. And with lenders easing their mortgage requirements, if you weren't approved for a mortgage previously, you may be able to secure one now. Mortgage lenders may be more willing to approve larger loans and applications from those with a lower credit score. This could bolster the prospects of homebuyers who couldn't compete with all-cash offers or afford to waive contingencies during the red hot housing market of the last two years. 

You still need to make sure you can afford higher mortgage payments, however. Buying a home at a 5.5% interest rate will add hundreds of dollars to your monthly payments, and thousands of dollars over the life of your loan. For example, if you buy a $500,000 house and put 20% down at a 5.5% interest rate, your monthly payment will be $2,666, compared with just $2,081 at a 3% interest rate. That's a difference of $585 a month.

Paying nearly 50% more for a home today than last year is a tough pill to swallow for prospective homebuyers, but with rates only expected to continue increasing, if you want to buy a home in 2022, locking in a rate sooner rather than later can save you money.