Mortgage Rates Hit A 22-Year High

First-time homebuyers' pursuit of the American dream is becoming increasingly elusive as soaring mortgage rates and home prices put a damper on their aspirations.

Heatedly climbing, the average rate of the benchmark 30-year fixed mortgage has hit the highest peak since 2001, compounding the struggles of buyers amid an already steep affordability crisis in the housing market.

Thursday's revelation from Freddie Mac, the renowned mortgage loan company, confirms the average rate for a 30-year fixed mortgage has ascended to a staggering 7.23%—marking a second consecutive multi-decade record after last week's crest of 7.09%.

Making comparisons to previous years more daunting, this time last year, the 30-year fixed rate averaged a not-so-distant 5.55%; additionally, the rate of the 15-year fixed mortgage also showed a hike, averaging 6.55%.

Sam Khater, Freddie Mac's chief economist, alluded that rates are not likely to see a decline in the foreseeable future, with continuing economic strength exerting upward pressure.

A notable factor in escalating rates is the Federal Reserve's hardline interest-rate increases, which sent mortgage rates skyrocketing.

Homeowners, who had previously seized low mortgage rates, are now hesitant to sell and risk a higher rate on a new property, diminishing the options available to incoming buyers.

Indicating a steepening crisis, as rates remain high and the supply of unsold homes devastatingly low, existing home sales are dwindling, despite a slight increase in new home sales, providing a sliver of relief to the mounting inventory conundrum.

Despite mixed data on housing—with existing home sales dropping last month while new home sales and construction slightly rose—Danielle Hale, the chief economist at Realtor.com, suggests that the rapid surge of rates past the 7% threshold and escalating costs of buying a home are discouraging potential buyers, causing them to retreat from the market.

Additionally, the recent decline in rents might cause hopeful first-time buyers to bide their time or prolong their lease rather than rush into a daunting and costly market.