Home sales fell for the third consecutive month in February as rising mortgage rates pushed affordability to its worst level in over a decade, according to new figures from the housing ministry.

The average rate on a 30-year fixed mortgage climbed to 7.4 percent last week, the highest level in two years, following a series of central bank rate decisions aimed at curbing persistent inflation in services and energy.

First-Time Buyers Hardest Hit

Affordability pressures are falling hardest on first-time buyers, who lack equity from an existing property to offset higher borrowing costs. The share of first-time buyers in the market dropped to 24 percent last month, a record low.

Despite slowing sales volumes, average property prices have not fallen significantly in most major cities, as limited housing supply continues to provide a floor under valuations. Economists are divided on whether a more pronounced correction lies ahead.

“There’s a standoff in the market,” said property economist Maria Chen. “Sellers who bought at low rates are not willing to sell and lock in a higher rate on a new purchase. Buyers can’t afford to pay current prices at current rates. Something has to give.”