In the wake of the Federal Reserve’s decision on Wednesday to approve a fourth-straight seventy-five-basis-point interest rate hike, there are growing fears that the move will only further pressure the fast-crumbling housing market, CNBC reported.

The rate increase, which boosted the central bank’s short-term borrowing rate to a target range of 3.75 percent to 4 percent, the highest level since January 2008, comes as mortgage rates continue to trek higher over the past week, surpassing 7 percent for the first time in two decades. There is now talk of 8 percent in the near future.

Rates on the popular thirty-year fixed-rate mortgage currently sit at 7.3 percent, according to Mortgage News Daily, up from 6.94 percent two weeks ago and roughly 3.2 percent from this time last year. According to LendingTree, a $300,000 loan on a thirty-year fixed-rate mortgage at December’s rate of 3.11 percent would have meant a monthly payment of about $1,280. Today’s rate of 7.3 percent brings the monthly payment to well over $2,000.

“Housing is significantly affected by these higher rates, which are really back where they were before the global financial crisis. They’re not historically high, but they’re much higher than they’ve been,” Fed Chairman Jerome Powell said during his news conference on Wednesday.

“We do understand that that’s really where a very big effect of our policies is,” he continued.

The Mortgage Bankers Association (MBA) reacted to the Fed’s rate hike by noting that peak mortgage rates have yet to be seen.

“The combination of elevated mortgage rates and steep home-price growth over the past few years has greatly reduced affordability,” MBA economist Mike Fratantoni said in a statement, per The Hill, adding that “the volatility seen in mortgage rates should subside” once inflation starts to come down.

Meanwhile, Sam Khater, Freddie Mac’s chief economist, said in a statement that “as inflation endures, consumers are seeing higher costs at every turn, causing further declines in consumer confidence this month.”

“Many potential homebuyers are choosing to wait and see where the housing market will end up, pushing demand and home prices further downward,” he continued.  

Michele Raneri, vice president of U.S. research and consulting at TransUnion, has suggested that potential homebuyers are increasingly looking into adjustable-rate mortgages.

These types of “mortgages may continue to be more popular among consumers seeking lower monthly payments in the short term,” she told CNBC. “And consumers looking to tap into available home equity may continue to look towards HELOCs.”

Ethen Kim Lieser is a Washington state-based Finance and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.

Image: Reuters.