Last week saw US mortgage rates climb to their highest point in nearly a year, while applications for home purchase loans dropped to a five-month low.

According to the latest weekly figures released by the Mortgage Bankers Association, the average contract rate for a 30-year fixed-rate mortgage increased by seven basis points to 6.65% for the week ending July 10th.

Concurrently, the association's index measuring mortgage applications for home purchases fell by 7.3%.

The dual trends of rising borrowing costs and declining application volume illustrate how inflationary pressures are impacting the US housing sector.

This development comes as investors broadly anticipate the Federal Reserve will continue raising its benchmark interest rate in the coming months to address price pressures.

In testimony before Congress, the Fed Chair highlighted that the housing market has become a notable weak spot within an otherwise resilient US economy.

He noted that persistently high 30-year fixed mortgage rates are partly attributable to inflation remaining above the central bank's target.

The Chair further expressed a commitment to supporting the goal of homeownership, which he described as a fundamental step in achieving broader economic aspirations for many Americans.