It doesn’t help that affordability is also taking a hit. Data from the National Association of Realtors show that the Quarterly Housing Affordability Index has been dropping thanks to a rise in median home prices.

High Rates and Home Prices Slam Southern California Housing Market 1While mortgage rates haven’t moved much since Monday’s 600-point drop in the Dow Jones Industrial Average, new data on inflation is scheduled to be released on Wednesday along with consume prices, which could force rates higher.

“If inflation comes in much stronger than expected, it should put noticeable upward pressure on rates,” said Matthew Graham, chief operating officer of Mortgage News Daily. “Conversely, weaker inflation could help the recent trend of improvement continue, unless the stock market is staging a huge comeback for an unrelated reason.”

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