Rising mortgage rates: Interest rates on 30-year mortgages have climbed to their highest level in two months, climbing from 6.9% to 6.94%.

Impact on Demand: Rising mortgage rates have dampened the spring home-buying season, which was traditionally busy.

Housing market momentum is expected to be set back by the trend.

Rate Volatility: The recent boomerang effect in mortgage rates has hampered the momentum of homebuying.

As spring approaches, the shift in rates will play a significant role in the market.

Economic Influence: In 16 meetings, the Fed increased interest rates 11 times, contributing to cool housing markets that are sensitive to interest rates.

Inflation remains a concern for policymakers even though interest rate hikes have been paused.

Housing affordability: Mortgage rates are highly correlated with home affordability, even when they change only slightly.

It has been estimated that borrowers could incur a $75,000 debt throughout a 30-year loan if rates shift from 3.79% to 5.25% over a year.

Supply and Demand Dynamics: Home prices increase with mortgage rates, which both affect demand and limit supply.

In comparison to pre-pandemic levels, 34.3% fewer homes are available due to sellers reluctant to sell due to the high mortgage rate environment.

Federal Reserve's Position: The Federal Reserve has deferred raising interest rates, but has not yet suggested cutting them.

Concerns about persistently high inflation have delayed market expectations for rate reductions until May or June.