It’s officially happened. Mortgage rates have just passed 8% for the first time since 2000, as the U.S. 10-year Treasury yield breached 4.9% in today’s session.

This surge in interest rates will certainly have a big-time effect on new homebuyers and continue to chill demand in an already near-stagnant housing market. Indeed, supply remains low in many key markets across the country. But with prices remaining high as a result of this diminished demand, affordability continues to remain a key issue for homebuyers, especially when factoring in these interest rates, which have not been seen in a generation.

It’s worth noting that various mortgage rate numbers are constantly floated in the market, with some measures focusing on average rates taken out by borrowers (including point buy downs) and others focusing on zero-point mortgages only. These data come from Mortgage News Daily, perhaps the most trusted source in the business for what the “actual” mortgage rate is at a given point in time.

Let’s dive into what today’s news means for homebuyers and investors alike.

Mortgage Rates Continue to Surge Higher

It’s really incredible to think of the four-decade-long run the bond market has had. The U.S. 10-year Treasury yield has moved in a rather linear fashion toward zero from early 1980s highs. Accordingly, an entire generation of homeowners and real estate investors have become accustomed to the idea that interest rates won’t go up meaningfully over an extended period of time.

This year’s move in the bond market has shaken that view. And considering the term premium being assigned to longer-dated debt such as mortgages now does not appear to be a great time to be a homebuyer.

For homebuilder stocks, an impressive rally earlier this year has stalled out as of this summer. This comes as investors digest the ultimate impact of lower demand versus low supply (an existing known). If demand for new homes plunges more than the already-suppressed supply of houses, it’s possible we could see prices come down and homebuilders be forced to take on more discounts to offload inventory.

It’s often said that the solution to higher prices is higher prices. At some point, affordability matters, even in the housing world (which presumably always goes up, as those in the industry would have you believe). It appears we’re approaching that breaking point now, where we’ll see some effect on prices moving forward. That’s the hope from the Federal Reserve and many would-be new home buyers, at least.