The highest mortgage rate since 2002 is 7%.

For the first time in twenty years, the average rate on a 30-year fixed mortgage surpassed 7% this week.

The average long-term mortgage rate in the United States increased to 7.08% from 6.94% a week ago, according to Freddie Mac’s report on Thursday. The 30-year rate was on average 3.14% a year ago.

According to Sam Khater, chief economist at Freddie Mac, “the 30-year fixed-rate mortgage cracked seven percent for the first time since April 2002, leading to increased stagnation in the housing market.”

The average for the 15-year fixed-rate mortgage increased from 6.23% to 6.36% during the previous week. The 15-year FRM’s average at this time last year was 2.37%.

The average rate for the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) increased from 5.71% last week to 5.96% this week. The 5-year ARM’s average rate at this time last year was 2.56%.

HIGHEST SINCE 2001: US MORTGAGE INTEREST RATES SOAR TO 7.16%

“As inflation persists, consumers are seeing greater costs everywhere, contributing to this month’s ongoing reductions in consumer confidence,” he added. In fact, a lot of prospective buyers are opting to hold off and see how the housing market shakes out, which lowers demand and property prices even more.

In a bid to curb the spiraling inflation, the Fed has increased its key benchmark lending rate five times this year. Three successive rises of 0.75 percentage points have taken the rate to a range of 3% to 3.25%, which is the highest level since 2008. When it meets next week, the central bank is anticipated to increase the benchmark interest rate by an additional 75 basis points.

US housing costs may decline by 20% the following year as mortgage rates rise.

Mortgage rates typically follow the yield on the 10-year Treasury note rather than necessarily reflecting Fed rate rises. This is affected by a number of variables, such as investor expectations for future inflation and the demand for US Treasury securities abroad.

Leading housing markets THOSE WITH AFFORDABLE HOUSES ARE THIS FALL

As mortgage rates have more than quadrupled this year, many prospective homebuyers have turned away. Since borrowing rates have risen to an unaffordable level for many Americans who are already spending more for food, petrol, and other necessities, existing house sales have decreased for eight consecutive months. Because they don’t want to lock in a higher rate on their subsequent mortgage, several homeowners have delayed listing their properties for sale.