The housing market is cooling again. Here's why.

A sluggish housing market for most of last year began to heat up as the calendar turned to 2024.

In recent weeks, however, the market has cooled once again.

A surge in mortgage rates accounts for the slowdown in the housing market, experts told ABC News, pointing to elevated home prices pushed out of reach for most consumers when combined with high borrowing costs.

The jump in mortgage rates is due to stubbornly high inflation that has delayed interest rate cuts at the Federal Reserve, experts said. Mortgage rates track yields on 10-year treasury bonds, which are highly sensitive to the Fed's benchmark rate.

"High mortgage rates and high housing prices have led to an affordability problem of a dimension that we haven't seen in decades," Susan Wachter, a professor of real estate at University of Pennsylvania's Wharton School of Business, told ABC News.

The average interest rate for a 30-year fixed mortgage has soared to 6.9%, rebounding after a steady decline at the end of last year, according to a report from Freddie Mac on Thursday.

Meanwhile, home sales have plummeted. Mortgage-purchase applications fell 10% from a week earlier, data from the Mortgage Bankers Association on Wednesday showed.

"Existing home sales have fallen off a cliff," Lu Liu, also a professor at the Wharton School at the University of Pennsylvania, told ABC News.

The housing market dynamic traces back to a highly anticipated announcement in December, during which the central bank revealed expectations of interest rate cuts in 2024.

The signal elicited a boost of optimism among key market players, who foresaw the end of the Fed's fight against inflation and the decline of interest rates from near-historic highs. In turn, yields fell on 10-year treasury bonds, and mortgage rates soon followed suit.

Inflation, however, has refused to cooperate. Stronger than expected economic performance and resilient consumer demand have helped buoy price increases, keeping them above the Fed's target rate.

"The strengthening of the economy is a surprise," Wachter said. "It does raise questions about the Fed's next steps."

Consumer prices rose 3.1% in January compared to a year ago, slowing markedly from the previous month but missing expectations of an even larger cooldown, a report from the Bureau of Labor Statistics earlier this month showed.

Inflation stands well below a peak of 9% last year but remains more than a percentage point above the Fed's target rate of 2%.

"The inflation rate is reflected in the 10-year treasury rate, which pushes mortgages up," Wachter said.

When the Fed initiated the rise of bond yields with its first rate hike of the current series in March 2022, the average 30-year fixed mortgage rate stood at just 4.45%. The average mortgage is now nearly 2.5 percentage points higher.

Each percentage point increase in a mortgage rate can add thousands of dollars, or even tens of thousands, in additional costs each year, depending on the price of the house, according to Rocket Mortgage.

The rising mortgage rates have put a freeze on the housing market in part because home prices remain high, Liu said. Potential homebuyers would rather stick with mortgages that have comparatively low rates rather than shift to higher rates that would compound the elevated home prices, she added.

"A lot of people are holding back from moving or selling," Liu said.

Observers would expect home prices to fall amid low consumer demand, but the stubbornly high housing costs may be owed to that reluctance among prospective homebuyers to first put their own homes up for sale, Liu added.

"It's a little bit of a puzzle why home prices have remained stable or even ticked up," Liu said. "Home owners may be buying, but they're not selling."