Sorry, homebuyers. Mortgage rates are expected to rise again—for now.

The latest inflation data, which came in hotter than anticipated on Tuesday, is likely to keep the U.S. Federal Reserve from making its eagerly anticipated interest rate cuts anytime soon. While mortgage rates are distinct from the Fed’s short-term interest rates, they have generally been moving in the same direction. So when the Fed does eventually lower its rates, mortgage rates are expected to fall.

Since the Fed is expected to keep rates higher for longer, that means mortgage rates are likely to remain elevated—much to the dismay of buyers.

“Punxsutawney Phil may be promising an early spring, but the housing market seems poised to face chilly winds for a while longer,” First American Economist Ksenia Potapov said in a statement.

Many buyers had gotten their hopes up as mortgage rates tumbled down from nearly 8% in the fall to the mid-6% range in mid-December after the Fed indicated rate cuts were on the horizon. Mortgage rates have since bounced around the mid-6% range, according to Freddie Mac data.

That could now change as rates move up, making purchasing a home even more unaffordable for frustrated buyers.

“In the short term, [mortgage] rates are likely to go higher. How high remains to be seen,” says Realtor.com® Chief Economist Danielle Hale. “They could cross 7%, but I think it’s more likely they’ll stay in the high [6% range].”

The Fed began hiking rates in March 2022 to combat high inflation, which peaked at 9.1% in June of that year. Inflation has since dropped to 3.1% annually in January, according to the consumer price index released on Tuesday.

While that’s a big improvement, inflation hasn’t quite reached the Fed’s target of 2%. Plus, January’s monthly rate of inflation ticked up higher than many economists expected, to 0.3% from December. That’s likely to result in the Fed postponing its rate cuts until later this year—and means mortgage rates are expected to remain higher for longer.

“If the Fed is looking for additional confidence that inflation is declining, this report is not going to bolster that confidence. It might even undermine it slightly,” says Hale. She points out, though, that this is one of several inflation reports that the Fed looks at every month to track inflation.

“I expect some of the data we will see over the next couple of weeks will be better and help to bring rates back down,” says Hale.

Many economists are optimistic that high shelter costs, which make up about a third of the goods and services measured in the consumer price index, will come down this year. (The category includes rent and the estimated costs of homeownership.)

Rental prices have been coming down since mid-2023, according to Realtor.com data. And home prices are no longer spiking by double digits on a national level.

Mortgage lender Shmuel Shayowitz saw mortgage rates tick up a little this morning after the inflation report was released. The president of Approved Funding, in River Edge, NJ, doesn’t expect that small increase will scare off many buyers.

The danger for buyers already grappling with affordability is if rates surge. Many real estate experts believe that is unlikely.

“When rates go above 7%, it will definitely have an impact psychologically and mathematically,” says Shayowitz.

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