Mortgage rates surged this week, as investors came to accept the likelihood of a much more aggressive series of rate hikes being announced by the Fed at the conclusion of their latest meeting Wednesday.

Average rate on a 30-year fixed rate mortgage jumped 0.1% to 6.28% Tuesday, according to numbers provided by Mortgage News Daily. That followed a .33% jump Monday on the inflation report shock. One week ago, the rate was 5.55%.

The real estate market has been hit hard by the rising mortgage rates, as mortgage demand plummeted. For six straight months, home sales have been falling, according to the National Association of Realtors. Home prices however have stayed high due to low supply and a still historically strong demand.

Some have noted this is the worst jump in Treasury yields since July of 2013, when the Fed said it would slow down purchases of the bonds, and investors sent rates skyrocketing.

Matthew Graham, chief operating officer of MND, wrote in a note, “The difference back then was that the Fed had simply decided it was time to finally begin unwinding some of the easy policies put into place after the financial crisis. This time around, the Fed is in panic mode about runaway inflation.”

In the first year of the pandemic, the Federal Reserve flooded money into mortgage-backed bonds, however more recently, it ended that support, and investors expect it will begin selling its holdings soon to reverse course as the economy overheats and inflation threatens.

That understanding set in back in January, and began to cause the rise in rates, which began at about 3.25%, and have risen steadily every month, save for May.

The rates have real world consequences for potential homeowners. As an example, a $400,000 home, purchased with 20% down, would have produced a monthly mortgage payment of $1,399 at the beginning of the year. However that monthly payment would now be $1,976, a rise of $577 per month, not including property taxes or homeowner’s insurance.