Pressures rise for homebuilders as rates hit 7-year high

FILE - In this May 7, 2009 file photo, homes built by D.R. Horton Inc. are shown in Cahndler, Ariz. Major homebuilders are taking a beating on Wall St

FILE - In this May 7, 2009 file photo, homes built by D.R. Horton Inc. are shown in Cahndler, Ariz. Major homebuilders are taking a beating on Wall St

WASHINGTON (AP) — The beating for homebuilders is continuing as rising interest rates and home prices keep potential buyers on the sidelines.

Mortgage buyer Freddie Mac said Thursday that the average rates on 30-year, fixed rate mortgages hit a 7-year high. Also Thursday, D.R. Horton said home deliveries in the first quarter will come in below what Wall Street was expecting. It's citing skyrocketing home prices and mortgage rates.

The Texas homebuilder led all other major players downward, falling 6 percent in midday trading. Others fell around 2 percent to 4 percent.

The Federal Reserve has been raising short-term rates to cool U.S. economic expansion, and is expected to raise rates for a fourth time this year in December. More are anticipated.

Sales of new U.S. homes have now declined for four months.