(Bloomberg) -- Mortgage rates in the US crossed 7% for the first time in more than two decades. 

The average for a 30-year, fixed loan rose to 7.08% from 6.94% last week, Freddie Mac said in a statement Thursday. That’s the first time the measure has climbed past 7% since April 2002.

Mortgage rates have more than doubled this year, throwing cold water on the frenzied housing market of the pandemic. The affordability crunch has sidelined potential buyers, sending home sales falling. Prices have started to drop from their Covid-era peaks.

“As inflation endures, consumers are seeing higher costs at every turn, causing further declines in consumer confidence this month,” Sam Khater, Freddie Mac’s chief economist, said in the statement. “In fact, many potential homebuyers are choosing to wait and see where the housing market will end up, pushing demand and home prices further downward.”

The Federal Reserve, scheduled to meet next week, has been hiking its benchmark rate this year in an effort to curb inflation that’s at multi-decade highs. That’s cooled housing and even started to chill the rental market.

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The increase in rates has led potential homebuyers to only be able to borrow 65% of what they could at the beginning of the year, said Greg McBride, chief financial analyst at Bankrate.com.

“You’ve got the strain on affordability coming from not just the significant increase in prices over the past two years, but now a gargantuan increase in mortgage rates this year,” McBride said.

The monthly payment on a $300,000 mortgage now would be roughly $2,012, about $710 more than in January, when the 30-year average was 3.22%. 

Other measures of borrowing costs have previously crossed the 7% threshold. Data from the Mortgage Bankers Association showed the average for a 30-year fixed mortgage topping 7% last week. 

Market Slowdown

Rates are so high now that Kamran Hanif, founder of Buckingham Mortgage in Vienna, Virginia, says he’s having to turn down customers left and right. Of the four callers his office received Wednesday, two didn’t qualify.

Some are looking at adjustable-rate mortgages, but even those products aren’t cheap any more, Hanif said. The average on a five-year adjustable-rate mortgage has more than doubled over the past year, Freddie Mac’s data showed Thursday.

“There’s no reaction time -- you turn your head and rates have gone up again,” Hanif said. “They’re not getting qualified.”

Despite the market’s pullback, buyers are still contending with high prices, squeezing affordability. The slowdown has hit companies including homebuilders. PulteGroup Inc. reported earlier this week that orders plunged and deal cancellations spiked as buyers face both financial and psychological hurdles. 

(Updates with Federal Reserve details in fifth paragraph, comments starting in sixth paragraph.)

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