Soaring mortgage rates reach their highest level since 2001

Mortgage rates in the United States have ballooned past 7 percent for the first time since 2001, continuing a chain of increases that have plagued the American housing market.

Data released Wednesday by the Mortgage Bankers Association showed contract rates on a standard 30-year fixed mortgage were at 7.16 percent, Bloomberg reported. This marks a 22-basis-point increase for mortgage rates and represents the 10th price hike in a row.

The MBA data is based on a weekly survey of the American housing market. This rate increase appeared to be in line with floundering real estate across the country, with the MBA reporting that applications to purchase or finance a home fell another 1.7 percent — the lowest activity in the market since 1997, according to Bloomberg. Total mortgage applications are now only half of what they were in 2021, it was reported.

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CNBC noted that, while the mortgage rate increases have been slowing down overall, rates are still significantly higher than the 3 percent seen at the beginning of this year.

There is also no likely end in sight for the current housing crisis, experts told USA Today. The National Association of Realtors told the outlet that despite the shrinking level of mortgage applications, demand for homes remains high, resulting in a housing shortage and a market filled with unaffordable properties.

The association estimated the total shortage nationwide to be around 5.5 million homes. New York City and Los Angeles were cited among the most problematic cities.