June’s Consumer Price Index showed a 5 percent year-over-year increase in what is now the largest annual Cost of Living increase for Americans in 17 years.
This is bad news for active home buyers because rising costs are considered inflationary and inflation causes mortgage rates to increase.
Predictably, mortgage rates jumped Wednesday morning after the CPI data was released and they edged higher throughout the rest of the day.
This morning, mortgage rates are higher again on unexpected strength in housing starts and building permits across the country.
Applying the mortgage rate movement this week to the true cost of owning a home, the quarter-percent increase since Tuesday has added $192 in extra mortgage payments per year per $100,000 borrowed.