Mortgage Rates Climb Above 7%, Weighing Heavily on US Housing Market

The US mortgage market continues to struggle under the weight of rising interest rates. The average rate on a 30-year fixed-rate home loan has now climbed above 7%, reaching its highest level in over 19 months.

This marks the fourth consecutive week of increased rates, with the benchmark 30-year fixed rate mortgage jumping to 6.95% from 6.76% last week. One year ago, the average rate was significantly lower at 6.26%. The upward trend is expected to continue, driven by inflation concerns and the Federal Reserve's decision to increase its key interest rate for the first time in three years.

Lisa Sturtevant, chief economist at Bright MLS, warns that this rate hike will further squeeze affordability and sideline prospective buyers. As mortgage rates rise, borrowing costs also increase, limiting homebuyers' purchasing power and potentially leading to delayed purchases or a decrease in sales.