Mortgage rates have surged to their highest level since late 2023, adding further pressure to a US housing market already weighed down by elevated borrowing costs.

Freddie Mac said in a statement on Thursday that the average rate on a 30-year fixed-rate mortgage jumped 25 basis points from a week earlier to 7.28%. That marks the largest weekly increase since October 2022. A year ago, the rate stood at 6.34%.

With home prices still near record highs, mortgage rates above 7% are significantly dampening housing demand. The combination of high prices and high rates has made homeownership unaffordable for many potential buyers, as well as for those hoping to trade down to a smaller home.

Brad Case, chief economist at Homes.com, said before the Freddie Mac data was released: "Rising mortgage rates are certainly hurting housing affordability. This is a big increase, and it will take some time for incomes to catch up."