From CNBC:

Mortgage rates surged after a monthly report on wholesale prices revealed higher inflation than expected. The 30-year fixed mortgage rate climbed to 7.14%, the highest in two months, following a government report on consumer prices that came in higher than analysts had anticipated. Optimism for lower rates in 2024 has now given way to skepticism.

The drop in rates last year had sparked optimism in the housing market, with sales of newly built homes surging 8% in December. Homebuilder sentiment improved, as builders reported that lower interest rates were bringing more traffic to their model homes. However, an increase in rates now could deter potential buyers, leading to weakened housing market activity.

Demand for homes has been strong despite high prices and low supply, but the recent surge in interest rates could drive buyers away. Both signed contracts on existing homes and new listings weakened when rates flattened in January. The upcoming President’s Day weekend is considered the unofficial start of the spring housing market, and the new trend in interest rates could significantly impact buyer activity.



Read more: Mortgage rates shoot to 2-month high after hot inflation report