Mortgage rates were on the rise this week, and as a result, home buyers faced higher borrowing costs. The 30-year fixed rate rose to its highest average in seven years, averaging 4.94 percent this week, Freddie Mac reports.

“The economy continued to show resilience as strong business activity and the growth in employment” drove mortgage rates higher, says Sam Khater, Freddie Mac’s chief economist. “Higher mortgage rates have led to a slowdown in national home price growth, but the price deceleration has been primarily concentrated in affluent coastal markets such as California and the state of Washington. The more affordable interior markets—which have not yet experienced a slowdown home price growth—may see price growth start to moderate and affordability squeezed if mortgage rates continue to march higher.”

Freddie Mac reports the following national averages for the week ending Nov. 8:

• 30-year fixed-rate mortgages: averaged 4.94 percent, with an average 0.5 point, increasing from last week’s 4.83 percent average. Last year at this time, 30-year rates averaged 3.90 percent.
• 15-year fixed-rate mortgages: averaged 4.33 percent, with an average 0.5 point, increasing from last week’s 4.23 percent average. A year ago, 15-year rates averaged 3.24 percent.
• 5-year hybrid adjustable-rate mortgages: averaged 4.14 percent, with an average 0.3 point, increasing from last week’s 4.04 percent average. A year ago, 5-year ARMs averaged 3.22 percent.

The Federal Reserve voted on Thursday to keep its key interest rate on hold, but signaled that rate hikes and tightened borrowing costs are likely on the horizon.

The Fed kept its benchmark target for rates unchanged in the 2 percent to 2.25 percent range. The Fed’s rate does not directly influence mortgage rates but does tend to have an effect.

“The labor market has continued to strengthen and … economic activity has been rising at a strong rate,” the U.S. central bank said in a statement. The Fed’s only note of caution on the economy was that growth in business investment had moderated in the third quarter. But inflation remains near the 2 percent target.

The Fed, which has already increased rates by one-quarter point three times this year, indicated that its next rate hike will likely be in December.

“Interestingly, there was no mention of the softer housing data,” Michelle Meyer, U.S. economist at Bank of America Merrill Lynch, said in a note about the Fed’s report. “Moreover, there was no mention of the sell-off in the stock market in October, which implies that Fed officials were largely willing to shrug it off.”

The popularity of ride-sharing services and the coming of driverless cars paints a picture of garages disappearing from American homes. But we’re not there yet. Americans are still mostly dependent on their cars, and that means homeowners crave garage space—a lot of it.

In fact, the majority of homeowners want space in their garages to accommodate two or more cars, Jenni Lantz, DesignLends manager for John Burns Real Estate Consulting, told home building industry magazine BUILDER. The firm recently surveyed about 24,000 new-home shoppers across the country and almost none of them said they sought a home without a garage. “I don’t think we’re quite in the no-car garage space yet,” Lantz said.

Of the 795,000 new single-family homes built in 2017, 65 percent had two-car garages and only 6 percent had one-car garages, according to data from the U.S. Census Bureau. In fact, the percentage of homes built with no garages has declined over the last decade, while homes built with two-car garages is one the rise.

Even households with only one adult or just one car are favoring larger garages. Some desire a two-car garage or more for the additional storage, according to Mikaela Sharp, a John Burns consultant.

As the size of homes goes up, so does the number of garage spaces the homeowner tends to want. For example, 78.3 percent of homes between 2,000 to 2,399 square feet have a two-car garage, while only 15.2 percent of homes smaller than 1,200 square feet have two-car garages, according to data from the National Association of Home Builders. Certain regions show a higher desire for three-car garages or more. Researchers identified one region that includes Kansas, Missouri, Minnesota, and the Dakotas as having the highest share of garage spaces at three or more. And in areas of the Southwest, such as in Texas, three-car garages are more popular than two-car garages.

Mortgage rates took a slight breather this week as borrowing costs moved lower and offset last week’s uptick.

Still, the housing market is trying to adjust to rates that are much higher than a year ago. “While higher mortgage rates have led to a decline in home sales this year, the weakness has been concentrated in expensive segments versus entry-level and first-time buyer [segments], which remain firm throughout most of the rest of the country,” says Sam Khater, Freddie Mac’s chief economist. “Despite higher mortgage rates, the monthly mortgage payment remains affordable. For many buyers the chronic lack of entry-level supply is a larger hurdle than higher mortgage rates because choices are limited and the inventory shortage has caused home prices to rise well above fundamentals.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Nov. 1:

• 30-year fixed-rate mortgages: averaged 4.83 percent, with an average 0.5 point, dropping from last week’s 4.86 percent average. Last year at this time, 30-year rates averaged 3.94 percent.
• 15-year fixed-rate mortgages: averaged 4.23 percent, with an average 0.5 point, falling from last week’s 4.29 percent average. A year ago, 15-year rates averaged 3.27 percent.
• 5-year hybrid adjustable-rate mortgages: averaged 4.04 percent, with an average 0.3 point, down from last week’s 4.14 percent average. A year ago, 5-year ARMs averaged 3.23 percent.