The 30-year fixed mortgage rate climbed to 6.95%, its highest level in 19 months, after the Federal Reserve raised interest rates Thursday, Sept. 17, for the first time in three years.

For a buyer financing a $400,000 home in Radnor or Haverford, the jump adds roughly $255 a month compared with rates in late February, when the 30-year average briefly dipped to 5.98%. In townships where recent median sale prices have topped $600,000, according to Zillow data reported by Patch, the monthly cost is higher still.

The Fed voted unanimously to raise its benchmark federal-funds rate by a quarter-point to a range of 3.75% to 4%, the Wall Street Journal reported. Officials signaled another hike could come later this year. Goldman Sachs now expects a second 25-basis-point increase at the Fed's October meeting, according to Reuters.

The rate has risen for four straight weeks, according to Freddie Mac's weekly survey. One year ago, the average stood at 6.26%. Real-time data cited by Yahoo Finance showed the rate crossing 7.01% on Sept. 17, above Freddie Mac's weekly average, which reflects rates through Wednesday.

Lisa Sturtevant, chief economist at Bright MLS, said the hike "all but guarantees that mortgage rates will remain stuck at or above the 7% threshold … a psychological and financial barrier that will sharply squeeze affordability and sideline even more prospective buyers."

The squeeze lands on a housing market already losing momentum. Existing U.S. home sales fell 2% in August from July to a seasonally adjusted annual rate of 3.98 million units, the slowest pace in more than a year, according to the National Association of Realtors (NAR).

It was the third straight monthly decline.

Northeast home prices climbed 4.3% year-over-year in August, faster than any other region, according to NAR. The national median hit $429,100, an all-time high for August. First-time buyers made up just 30% of purchases, well below the historical norm near 40%.

Mortgage rates have been climbing since the U.S.-Iran war began in late February, as expectations of higher inflation and surging oil prices pushed up the 10-year Treasury yield. That yield breached 5% on Tuesday, Sept. 15, for the first time since 2023 and stood at 4.94% at midday Sept. 17.

NAR chief economist Lawrence Yun warned on Sept. 10 that rates could soon hit 7%. "It's not a surprise home sales and mortgage rates move in the opposite direction and we have seen mortgage rates rising, rising, rising from February," Yun said at the time, as we reported when August sales figures were released.

Unsold homes nationally reached 1.62 million at the end of August, a 4.9-month supply and the highest level in over a decade. About 20% of listings had their asking price cut, according to Realtor.com.

The Fed's next policy meeting is scheduled for late October. If Goldman Sachs' forecast holds, another quarter-point hike would push the federal-funds rate to 4% to 4.25%.