By Safiyah Riddle

Rates on the most popular U.S. home loan hit the highest level since 2001 on Thursday, according to Freddie Mac's weekly mortgage market survey.

The popular 30-year mortgage rates rose to an average of 7.23% this week, the highest level in over two decades, up from 7.09% last week, which was the first time the rate passed 7% in 2023. Earlier this week, the Mortgage Brokers Association reported that decades-high borrowing costs drove mortgage applications to a 28-year low over the same period.

The yield on the 10-year Treasury note, which acts as a benchmark for mortgage rates, has increased throughout the month as resilient economic data stokes concerns that the Federal Reserve's interest rate hiking campaign is not over.

Although expensive borrowing forced home sales to plummet last year, an acute lack of inventory has threatened a housing market recovery.

Freddie Mac chief economist Sam Khater said more increases could be on the horizon if strong consumer spending and the labor market continue to be this robust.

"This week, the 30-year fixed-rate mortgage reached its highest level since 2001 and indications of ongoing economic strength will likely continue to keep upward pressure on rates in the short-term," said Khater.

(Reporting by Safiyah Riddle; Editing by Chizu Nomiyama)