Mortgage rates have spiked to more than 7 percent as luxury home sales plummet by 28 percent and regular market sales sink by 19.5 percent amid soaring federal interest rates and inflation. 

According to Mortgage Daily News, 30-year mortgage rates have now hit 7.08 percent - the highest level in 21 years - following the Federal Reserve's latest 0.75 percent interest rate hike.     

It comes as luxury home sales see their biggest year-over-year decline in August since the pandemic brought the housing market to a standstill in 2020, with sales dropping by 23.2 percent, according to Redfin's latest report. 

Sales of luxury homes have sunk in all the nation's top 50 metro areas, with the largest drops seen in Oakland, California, at 63.9 percent; San Jose, California, at 59.6 percent; Miami at 55.5 percent, San Diego at 55.3 percent and Seattle at 52 percent. 

Portland; Nassau County, New York; Washington, D.C., New York City; and St. Louis all saw the smallest decrease in luxury home sales. 

Meanwhile, in the non-luxury market, San Diego; San Jose; Anaheim, California; Phoenix; and Washington, D.C. have seen the biggest drop in sales. 

The greatest changes are concentrated in West Coast metropolitan areas, where the markets have been affected by a mass exodus of citizens deterred by pricey homes, rising crime and warnings of a looming recession. The rise of work-from-home culture also freed tech sector employees in the West Coast to move to more affordable cities.