US Stock Market: Mortgage rates hit 9-month high as inflation worries deepen

US mortgage rates just surged past 6.65%, hitting a nine-month high last week, as stubbornly persistent core inflation forces the Federal Reserve to maintain its hawkish posture longer than markets had anticipated. This jump, driven largely by elevated oil prices and robust wage growth, directly throttles housing affordability for millions of prospective buyers. This latest spike is a direct consequence of a resilient US economy, where strong consumer spending and a tight labor market are keeping price pressures elevated, defying earlier predictions of a rapid disinflationary trend. Compounding the challenge is the acute "rate lock-in effect"; homeowners with sub-4% mortgages are simply not selling, starving the market of inventory and sending mortgage applications plummeting to multi-year lows. The Fed's sustained quantitative tightening further exacerbates market liquidity. Markets are now pricing in a prolonged period of elevated borrowing costs, with little relief expected from a Federal Reserve committed to its inflation fight, even if it risks a "higher for longer" economic scenario. Expect a continued chill on housing transaction volumes, intensifying calls for government intervention in housing supply, and a sustained affordability crisis for Gen Z and millennial aspirational homeowners.