Mortgage rates in the US have surged to their highest levels in over two decades. The average rate for a 30-year fixed loan reached 7.09%, marking an increase from the previous week's 6.96% and the highest rate seen since April 2002. Freddie Mac released this information in a statement on Thursday.

The recent upward trend in borrowing costs, coupled with elevated home prices driven by a pronounced shortage in housing inventory, has led to a notable deterioration in housing affordability, reaching its lowest point since 1984 according to Black Knight Inc. The scarcity of available properties, rising expenses, and concerns about the economy have dampened sales of pre-owned homes as many potential buyers are being held back.

Sam Khater, Chief Economist at Freddie Mac, mentioned in the statement that although demand has been impacted by affordability challenges, the primary reason for the slowdown in home sales is the insufficient supply of homes.

Federal Reserve policymakers have hinted at the possibility of more interest rate hikes to counter inflation. This suggests that significant relief for borrowers may not be achievable for the foreseeable future.