Rising interest rates create a new challenge for first-time homebuyers

The Federal Reserve is set to increase borrowing costs by raising interest rates as part of an attempt to cool surging inflation.

The housing market has been unforgiving to first-time buyers like Kirstin Harris.

“You have to be so competitive,” she told ABC News. “By the time we even like a house to put in an offer, it's already gotten an offer that's been accepted.”

Harris and her family are trying to purchase their first home in Virginia. But like many other buyers nationwide, she’s facing surging prices and bidding wars – fueled by strong demand and a lack of available homes.

“The new inventory that I'm seeing coming on has been increased by about $50,000,” she said.