Katy Texas mortgage rates rose to their highest levels since July 2015 as we ended the week. That new home you may have been looking to purchase just became more expensive. Unless you already had a mortgage rate locked in, higher rates likely means higher home payments or diminished expectations.

As Friday came to a close, mortgage brokers were discussing the wreckage of higher yields and looking at a new interest rate landscape, at least in the short term. Mortgage News Daily explained the closing of the week in the mortgage market…

“The most prevalent conventional 30-yr fixed rate quote is now 4.125% on top tier scenarios, and more than a few lenders are already up to 4.25%.”

November 2016 may go down as one of the most damaging months for mortgage rates during the past decade. This development has not gone unnoticed, as even some Fed apologists housing market gurus are now acknowledging that the housing market will likely cool in the months ahead. The big question is how long this new higher-rate landscape lasts.

We should not forget that the ticking time bomb of the last housing crisis was sparked by higher interest rates. When the Fed raised rates in the last cycle, it was too late. The damage was already done. The central bank merely put the dominoes into motion, and of course we know how that story ended.

This housing cycle looks different, but there are signs that U.S. housing markets are still overdue for some softening. Even San Francisco is running out of greater fools because there apparently is a limit to how many people can afford a million dollar crap shack.

As I have been explaining for most of the week, people buy payments, not just home prices. This is why some area homebuilders and developers probably saw their optimism trimmed with the spike in yields this week. The incoming administration is looking at some audacious and likely inflationary policies. Regardless of who won the election, I think the challenges facing the economy were baked in the cake. The only question is who would have run up the deficits and national debt faster.

One of the most significant policy failures of the past decade was the obvious policy choice to ignore Wall Street’s serial crimes and reject bailouts for homeowners. After the last housing crisis Wall Street was made whole; Average Americans were not. This, along with the Federal Reserve’s trickle-down monetary mayhem, caused a massive wealth redistribution to the top 1 percent. Those ghosts of policy errors past are now coming home to roost in a big way.

We have witnessed years of a reported “recovery” as the U.S. housing market became more bifurcated and home prices in many markets have climbed above previous bubble-level peaks. The same trickle-down monetary experiment that led to median home prices of $1.4 million in San Francisco and a giant oil bust is looking more and more like an epic failure, an enormous cover-up of past mistakes (aka frauds) that have enriched the few at the expense of the many.

Will higher mortgage rates finally spell the end of this new housing cycle reflation? If Lacy Hunt and Van Hoisington are correct, demand for those big ticket items was already poised to soften this late in the current economic cycle. Higher mortgage rates could just be the finishing touch on the portrait of a housing cycle that has peaked.