Struggling US home buyers, and market, face new hurdles as mortgage rates near 7%

Homebuyers in the United States are facing new obstacles as mortgage rates edge closer to the 7% mark. The weekly average rate on a 30-year fixed-rate home loan has risen to 6.76% and is expected to surpass 7% soon, according to mortgage buyer Freddie Mac. Higher rates mean increased monthly costs for borrowers, which can limit the buying power of prospective home shoppers.

The housing market has been struggling due to mounting borrowing costs, driven by surging oil prices and expectations of higher inflation. The Federal Reserve's recent decision to raise its key interest rate for the first time in three years has further fueled concerns about a potential slowdown in the housing market. Experts warn that the rate hike could create a psychological and financial barrier, making it difficult for buyers to afford homes with rising mortgage rates.