Mortgage Rates Hit 20-Month High as Homebuyers Face Fresh Headwinds

The US mortgage rate has reached a 20-month high of 7.03% for a 30-year fixed mortgage, according to Freddie Mac.

This marks the fifth consecutive weekly increase and follows the Federal Reserve's decision last week to raise its benchmark interest rate by a quarter percentage point.

The higher rates come at a challenging time for homebuyers who are already dealing with high property prices and inflation. The median price of an existing home reached $429,100 in August, an annual increase seen in 38 consecutive months.

Economists have warned that 7% carries psychological significance for buyers and sellers, as it could discourage buyers and reduce housing activity during a traditionally important season for home sales.