Mortgage Rates Hit 22-Year High as Housing Market Cools

30-year fixed mortgage rates hit 7.5% this week, highest since 2000, per Freddie Mac data. Caused by rising yields on 10-year treasury bonds.

Mortgage applications dropped 6% last week and 22% from last year, per Mortgage Bankers Association. Purchase market activity lowest since 1995.

Median existing home price rose 4% in August to $407,100, according to National Association of Realtors. Supply needs to double to moderate price gains.

Adjustable-rate mortgages gaining popularity, hitting 8% of applications as buyers seek lower payments.

Rates could hit 8% this year, slowing housing market to 2010 levels per Bright MLS economist. Transactions would drop with only necessary buyers and sellers.