(Bloomberg) -- Mortgage rates in the US climbed to the highest since 2000, ramping up the pressure on potential buyers.

The average for a 30-year, fixed loan rose for a third week, reaching 7.31%, up from 7.19% last week, Freddie Mac said in a statement Thursday.

Mortgage rates topping 7% for the past seven weeks are hurting affordability for buyers and weighing on purchases. Contracts to buy previously owned homes slipped 7.1% in August from a month earlier, according to National Association of Realtors.

“Unlike the turn of the millennium, house prices today are rising alongside mortgage rates, primarily due to low inventory,” Sam Khater, Freddie Mac’s chief economist, said in the statement. “These headwinds are causing both buyers and sellers to hold out for better circumstances.”

Read More: US Pending Home Sales Index Slides to Lowest Level Since 2020

Tightening inventory pushed home values to a record high in July, according to data released this week by S&P CoreLogic Case-Shiller. But price growth may have its limits. For the four weeks ending Sept. 24, sellers dropped prices on roughly one in 15 homes for sale, the highest level since November, according to Redfin Corp.

A buyer with a $600,000 mortgage would be paying $4,118 a month at this week’s average rate, 58% more than in early 2022, before the Federal Reserve started hiking its benchmark rate. 

Buying a starter home is now more expensive than renting in all but three of the 50 top metro areas in the US, according to a Realtor.com study.

That “explains why buyer demand is likely to remain relatively low,” Realtor.com’s Chief Economist Danielle Hale said in a statement.

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