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Mortgage rates have surged past 7% and home sales in March posted their biggest monthly drop in more than a year, renewing pressure on the U.S. housing market as uncertainty over real-estate commissions buffets the industry.

The average rate on the standard 30-year fixed mortgage jumped by nearly a quarter percentage point to 7.1%, according to a survey of lenders released Thursday by mortgage-finance giant Freddie Mac. That is the highest level since late 2023 and the largest weekly increase in nearly a year.

Existing home sales in March, meanwhile, fell 4.3% from February in what was the largest percentage decline on a monthly basis since November 2022, the National Association of Realtors said Thursday.

U.S. existing-home salesSource: National Association of RealtorsNotes: Seasonally adjusted at an annual rate; March 2024 is preliminary.

March: 4.19 millionMarch 2023'24012345million

The housing market's recent turbulence is cutting short a positive start to the year. Sales tumbled to theirlowest level in nearly 30years in 2023. But they roseduring the first two months of this year as a number ofbuyers took advantageof a decline in mortgage rates to resume their home search. Active listings ticked higher and real-estate showings picked up in January.

Mortgage rates started to rise again in February, weighing on March sales. The recent spike in borrowing costs could drag affordability back to the historic lows it reached last year. Home prices are near record highs. Other costs to own a home, such as insurance premiums, property taxes and maintenance,have skyrocketed, too.

Home buyers are also confused aboutcoming changes to the rulesgoverning how real-estate agents get paid, and whether those changes could increase or decrease their overall costs. NARreached a historic settlement of claims last month that the industry conspired to keep agent commissions high. The new rules are expected to make it easier for home buyersto negotiate feeswith their own agents.

That could prompt some home shoppers and sellers to pause until there is more clarity when the new rules go into effect in July.

The combination of higher rates and uncertainty about the new commission structure now threaten to halt momentum during the crucial spring home-buying season, which is typically the housing market's busiest time of year.

"There's so many mixed signals now in the market that for many people, it's just too much," said Selma Hepp, chief economist at CoreLogic. "I think they're just sitting it out."

While many economists expect rates to decline later this year,stronger-than-expected inflation datalast week could prompt Federal Reserve officials to hold rates at their current level for longer.That's pushed up the yield on 10-year Treasurys, which mortgage rates tend to track.

A persistently low supply of homes for sale is also pushing prices higher. The national median existing-home price rose 4.8% in March from a year earlier to $393,500, NAR said.

U.S. median existing-home price, change from a year earlierSource: National Association of RealtorsNote: March 2024 is preliminary.

March: +4.8%2010'15'20-100102030%

"Home sales are essentially stuck," said Lawrence Yun, NAR's chief economist. "We need more inventory, definitely."

On an annual basis, existing home sales, which make up most of the housing market, fell 3.7% in March.

Economists surveyed by The Wall Street Journal estimated sales of previously owned homes fell a seasonally adjusted 4.8% in March from February.

Homes typically go under contract a month or two before the contracts close, so the March data largely reflect purchase decisions made in February and January.

For some who bought in March, they found less competition.David BramlettandAlexandra Hodsonstarted house hunting last fall but decided to wait. When they re-entered the market this year, interest rates had declined, Bramlett said.

David Bramlett and Alexandra Hodson bought a home in Cumming, Ga., in March.PHOTO:JAMIE LEE YAWN

The couple bought a four-bedroom home with a yard in Cumming, Ga., in March for $480,000.

"There was no bidding war," Bramlett said. "It was good to get in when we did, where we did, with a motivated seller."

But affordability has worsened in recent weeks. The median monthly payment for a home purchase rose to $2,775 in the four weeks ended April 14, up 10.6% from a year earlier, according to real-estate brokerageRedfin.

"March and April slowed down tremendously," saidClint Jordan, a real-estate agent in Colorado Springs, Colo. "Rates are a little bit higher, so a lot of our buyers are sitting back."

The costs of buying a home are also outpacing the increases in rent, making it relatively cheaper to rent.

The average monthly new mortgage payment was 38% higher in the U.S. than the average apartment rent at the end of 2023, according to an analysis byCBRE. That premium has been in the double digits for two years.

"It's never been this high for this long," saidMatt Vance, senior director and Americas Head of Multifamily Research at CBRE. "It doesn't seem likely that it will come down any significant amount in the next several years."

The supply of homes for sale rose in March but was still 37.9% below typical prepandemic levels, according to Realtor.com.