Much to the frustration of future homeowners, fast-rising mortgage interest rates are hitting homebuyers harder and harder.

The average rate on the popular thirty-year fixed mortgage trekked higher by ten basis points to 6.28 percent on Tuesday, according to Mortgage News Daily. That increase followed an eye-popping thirty-three basis point jump on Monday. Just last week, the rate was sitting at 5.55 percent.

“Rising rates have caused a sharp turnaround in the housing market,” CNBC reported.

“Mortgage demand has plummeted. Home sales have fallen for six straight months, according to the National Association of Realtors. Rising rates have so far done little to chill the red-hot home prices fueled by historically strong, pandemic-driven demand and record low supply,” the report continued.

In one example, the monthly mortgage payment—not including homeowner’s insurance or property taxes—on a $400,000 home with a 20 percent down payment has climbed from $1,399 at the beginning of January to $1,976 today. That’s a difference of nearly $580.

“Housing activity is slowing in the face of higher mortgage interest rates,” Matthew Pointon, senior property economist at Capital Economics, said in a report per CBS News.

“Mortgage applications for home purchase dropped to a two-year low in May, existing homes sales have declined in each of the three months to April and new home sales recorded their largest month-on-month decline in almost nine years,” he added.

Adding to the misery is the plummeting sentiment among the nation’s homebuilders. That gauge fell for the sixth straight month to the lowest level since June 2020, when the U.S. economy was grappling with shutdowns stemming from the ongoing coronavirus pandemic.

“Six consecutive monthly declines for the HMI (Housing Market Index) is a clear sign of a slowing housing market in a high-inflation, slow-growth economic environment,” National Association of Home Builders Chairman Jerry Konter told CNBC.

“The entry-level market has been particularly affected by declines for housing affordability and builders are adopting a more cautious stance as demand softens with higher mortgage rates,” he continued.

Despite such headwinds, according to a report by Zillow researchers, it appears that home prices could see another year of significant gains. The real estate firm is now predicting that prices will climb 11.6 percent over the next twelve months, down from its previous forecast of 14.9 percent.

“These downwardly revised projections would still represent a very strong housing market in the coming year,” Zillow researchers wrote. “In the history of the Zillow Home Value Index, which dates back to 2000, annual growth has only exceeded the current year-ahead projection of 11.6% during this recent run of record-breaking growth, and during a several-month stretch in 2005.”

Ethen Kim Lieser is a Washington state-based Finance and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.

Image: Reuters.