INDIANAPOLIS (WISH) — The average rate on the popular 30-year fixed mortgage hit 7.48%, the highest level since November 2000, according to Mortgage News Daily.

It has risen 29 basis points in the past week.

“Investors just aren’t seeing the kind of deterioration in economic data that they expected,” said Matthew Graham, chief operating officer for Mortgage News Daily.

Graham said the Federal Reserve wants to see the same deterioration before considering a policy shift, and that shift would likely favor short-term rates first.

“The net effect is that longer-term rates like 10-year Treasury yields and mortgages are bearing the brunt of the market’s negative rate sentiment. This won’t change until the data forces the Fed to start talking about the first rate cut.”

The average of the 30-year fixed last year at this time was around 5.5%. For someone buying a $400,000 home with 20% down on a 30-year fixed loan, the monthly payment today, with principal and interest, is roughly $420 more than it would have been a year ago, according to CNBC.

The Mortgage Bankers Association reports that more borrowers are now opting for adjustable-rate loans, which offer lower interest rates for shorter fixed terms. The average rate on a 5-year ARM last week was 6.2%. The ARM share of applications rose to 7%. In 2020, when the 30-year fixed was setting multiple record lows, that share was less than 2%.

This news has impacted home sales. the Mortgage Bankers Association index of home-purchase applications fell 5% to 142, the lowest level since 1995. The data further illustrate the trend — homeowners are reluctant to move and take on a higher mortgage rate, so prospective buyers are seeking out new construction instead. A separate report released Wednesday showed new-home sales rose last month to the highest level in a over a year after downward revisions to prior months.