Mortgage charges surged to a 21-year excessive this week, a soar that may make it even more durable for consumers to afford properties in a market hampered by excessive costs and low stock.

The common 30-year fixed-rate mortgage — the preferred dwelling mortgage within the United States — was 7.09 p.c, up from 6.96 p.c final week, Freddie Mac stated on Thursday. A 12 months earlier, the 30-year fee was 5.13 p.c.

Analysts say they anticipate mortgage charges to stay lofty within the close to time period, and to begin cooling solely progressively by the top of the 12 months. The present fee is the very best since April 2002. Since then, dwelling consumers loved years of falling charges, which even dipped under 3 p.c originally of the pandemic.

But as mortgage charges started abruptly rising final 12 months, when the Federal Reserve began lifting rates of interest to rein in speedy inflation, the housing market has stagnated, as house owners with low mortgage rates have been unwilling to place their properties up on the market.

In June, gross sales of current properties fell almost 19 p.c from the 12 months earlier than, in keeping with the National Association of Realtors. The shortage of listings has saved housing costs elevated: The median value of an current dwelling was $410,200 in June, the second-highest because the group started monitoring the information in 1999, down solely marginally from a excessive of $413,800 a 12 months in the past.

And consultants don’t suppose the housing market will cool off anytime quickly. On Tuesday, Goldman Sachs revised upward its forecast for dwelling costs, predicting a 1.8 p.c rise in costs this 12 months and three.5 p.c soar in 2024. “Affordability remains burdensome,” analysts on the financial institution stated in a report, citing a tighter housing provide and a gentle demand for properties.

That’s unhealthy news for would-be dwelling consumers like Kathleen Schmidt, who rents a home in Toms River, N.J., along with her husband and two teenage youngsters. She stated that they had been attempting to avoid wasting for a 20 p.c down fee on a townhome close by, and that the soar in mortgage charges was discouraging.

“I just felt in the pit of my stomach: We are never going to be able to buy a home,” stated Ms. Schmidt, who owns KMSPR, a public relations agency for authors and publishers.

“My dream forever was to own a home someday because it’s something my parents never did,” she added. “We want something left for our kids.”

Affordability is a persistent problem for dwelling consumers, stated Jeff Ostrowski, an analyst on the private finance firm Bankrate, who predicted that charges would stay elevated for a while.

“I think buyers are going to have to buckle their chin straps and figure out how to make it work,” he stated.

The shortage of current properties on the market has pushed consumers to think about new building. The sale of latest properties climbed almost 24 p.c in June from the identical interval a 12 months earlier, the Census Bureau reported. Housing begins, a measure of the development of latest properties, elevated about 6 p.c in July from the earlier 12 months.

“The builders are making profits, and their stock margins have increased from a year ago,” stated Lawrence Yun, the chief economist on the National Association of Realtors. He added that nationwide builders like KB Home, Lennar and Toll Brothers would proceed so as to add stock to make Wall Street comfortable, however that they had been centered extra on higher-priced properties.

For dwelling consumers, discovering inexpensive choices stays tough. The Federal Reserve has lifted its coverage rate of interest, which underpins borrowing prices throughout the financial system, to the very best stage in 22 years because it tries to sluggish inflation by cooling the financial system. Although value pressures have abated, with the annual fee of inflation moderating from almost 9 p.c final 12 months to only above 3 p.c last month, a latest uptick in gasoline costs might prop up inflation figures.

Officials on the central financial institution have steered that additional fee changes could possibly be doable this 12 months. They anticipate to chop charges in 2024, however they suppose it could be several years earlier than charges return to the decrease ranges that had been frequent earlier than the pandemic.

Mortgage charges usually monitor the yield on 10-year Treasury bonds, that are influenced by quite a lot of elements, together with expectations round inflation, the Fed’s actions and the way buyers react to all of it. On Thursday, the 10-year yield rose above 4.3 p.c for the primary time since 2007.

For dwelling consumers and market watchers, the query stays, how lengthy will mortgage rates remain high?

Mr. Yun predicted that charges would slowly begin to ease by subsequent spring and even by the 12 months’s finish, coming down to six.5 p.c, which continues to be greater than double the speed in 2021. But he stated the Fed’s battle towards inflation and the latest downgrade in the nation’s credit rating continued to place strain on mortgage charges.

“The housing market is in a tough spot,” he stated.