US Mortgage Rates Brush 7% as Housing Market Faces New Hurdles

The US housing market is facing new challenges as mortgage rates continue to rise. The average rate on a 30-year fixed-rate home loan has climbed to just below 7% for the first time in over 19 months, according to Freddie Mac. This marks the fourth consecutive week of higher mortgage rates, with the benchmark 30-year fixed rate rising to 6.95% from 6.76% last week.

The increase in borrowing costs is limiting homebuyers' purchasing power and leading prospective buyers to delay buying. Higher mortgage rates can add hundreds of dollars a month to borrowers' costs, making it more difficult for them to afford homes. The housing market has been sluggish this year due in part to rising borrowing costs, as mortgage rates have increased since the war between the US and Iran began in late February.

The Federal Reserve's decision to raise its key interest rate could also put upward pressure on mortgage rates. While the central bank doesn't set mortgage rates directly, its decisions are watched closely by bond investors and can ultimately affect the yield on 10-year Treasurys.