Mortgage rates jump sharply higher, after easing for four straight weeks. Here's why

Mortgage rates fell for four straight weeks, but that ended Tuesday, after a monthly inflation report came in hotter than expected. The average rate on the 30-year fixed mortgage rose 12 basis points from Monday to 7.30%, according to Mortgage News Daily. It was the largest one-day jump in more than a month.

The consumer price index showed broad upward pressure on prices, not just fuel-related costs. This came after a monthly employment report Friday that also showed a more heated economy than analysts had predicted.

"Given that the Fed explicitly said it was more focused on the inflation component of its job description at the moment (as opposed to the 'full employment' component), we were expecting today's data to carry far more weight than last week's jobs report. The reaction was logical an immediate," wrote Matthew Graham, chief operating officer at Mortgage News Daily.

This jump comes after a monthlong reprieve in interest rates that finally brought mortgage demand back. Last week, mortgage applications rose 6.2% from the previous week, according to the Mortgage Bankers Association's seasonally adjusted index.

That's because last week, on a weekly average from the MBA, the rate on the 30-year fixed had decreased to 7.21% from 7.30%, for loans with a 20% down payment. That was the fourth straight weekly decline and the lowest rate since mid-September.

As a result, applications to refinance a home loan rose 5% last week from the previous week but were still 57% lower than the same week one year ago.

"Moreover, the FHA rate was back below 7 percent and was more than 20 basis points lower than the conforming rate, which helped first-time home buyers currently in the market," said Joel Kan, vice president and deputy chief economist at the MBA.