Mortgage rates hit 20-year high at nearly 7%

Mortgage rates are at their highest point since April 2002.

Why it matters: The recent surge in rates has slammed the brakes on activity in the residential real estate sector.

• Plunging housing affordability could also become a contentious political issue.

The latest: The average rate on the 30-year fixed rate mortgage hit 6.92%, according to Freddie Mac. Just a year ago it hovered around 3%.

• In October 2021, the principal and interest payment on the median-priced American home was about $1,500 a month, according to our own tinkering on Bankrate's mortgage calculator.
• Now: It's nearly $2,400 a month, almost $900 more.

The bottom line: The Fed’s rate increase regimen is designed to slow the economy. It's working — and the housing slump is well underway.