The average rate on a 30-year mortgage in the United States jumped to 7.03 percent, putting pressure on housing affordability. Mortgage rates fell below 6 percent in late February, offering a glimmer of hope that the housing market was recovering from a yearslong slog. But they began steadily rising again after the United States and Israel launched attacks on Iran on Feb. 28.

"A move from 6 to 7 is a big change," said Stijn Van Nieuwerburgh, a finance professor at Columbia University’s Graduate School of Business, "and it will further dampen an already weak housing market." Since war broke out in the Middle East, oil shipments from the Persian Gulf have dwindled, pushing up prices for energy products.

Higher mortgage rates in turn are weighing on a moribund housing market. Sales of existing homes fell 2 percent in August from July and are at their lowest level since June last year, the National Association of Realtors reported. Home prices rose 1.5 percent annually in June, according to Cotality.

"Nobody can afford to buy a house anymore at these high prices and at these higher mortgage rates," said Professor Van Nieuwerburgh. Americans have amassed a record $35 trillion in home equity, according to the Federal Reserve Bank of St. Louis.