Some sobering news: For would-be buyers who have had their home searches foiled or delayed by soaring mortgage interest rates, the housing market is likely to get worse before it gets better.

Mortgage rates are expected to keep rising after new indicators showed that inflation rose 7.7% year over year in October, according to a Bureau of Labor Statistics report released on Thursday. The U.S. Federal Reserve has been hiking its interest rates in an all-out war against stubbornly high inflation, leading to the surge in mortgage rates.

The hikes appear to be making a dent as inflation was down a little from 8.2% year over year in September. But it was still high enough that the Fed is likely to continue to shock the economy with more rate hikes that are pushing the nation to the brink of a recession.

When the Fed raises its rates, mortgage rates typically follow—much to the displeasure of homebuyers. Those higher mortgage rates have priced many first-time buyers out of homeownership, while others have been forced to drastically reduce their budgets and expectations.

“The drop may not be enough to assuage concerns about where the economy—and rates—ultimately are headed,” Bright MLS Chief Economist Lisa Sturtevant says in a statement. “Even as rate hikes begin to slow inflation, the Fed will continue on its path of continued rate increases. As a result, we should expect mortgage rates to also stay elevated.”

Mortgage rates have more than doubled since the start of the year, jumping from 3.22% in January to 7.08% in the week ending Nov. 10, according to Freddie Mac. These were average, weekly rates for 30-year fixed-rate mortgages.

Homebuyers today are paying about 81% more each month than they did just one year ago. That factors in year-over-year October median home list prices as well as average mortgage rates in the second week of November this year and last for 30-year fixed-rate loans.

“The desire for homeownership is strong, but purchase activity is still well below last year’s levels when rates were lower,” Bob Broeksmit, president and CEO of the Mortgage Bankers Association, says in a statement. “Many prospective buyers are waiting for the volatility in mortgage rates to subside, as well as for a clearer picture of the economic outlook.”

Still, there were some bright spots in the inflation report that could bode well for buyers in the housing market. Annual inflation fell to 7.7% in October, down from 8.2% in September. And from September to October, inflation rose just 0.3%. If inflation continues slowing, at some point the Fed will stop raising its rates and mortgage rates should come down.

“Could it be better? Sure,” says Realtor.com® Chief Economist Danielle Hale. “Inflation data is a glimmer of hope. It’s not a big, bright burning fire, but it starts with a glimmer.”

She expects that mortgage rates will continue rising, but won’t reach 8%. And early next year, she anticipates inflation could fall enough that the end of these rate hikes can be seen on the horizon.

October’s inflation report “is not yet enough” to deter the Fed from raising rates, says Hale. But these increases are “not forever.”

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