WASHINGTON (Reuters) – U.S. mortgage rates increased to a fresh six-month high this week, a trend that along with elevated house prices could further squeeze potential buyers from the market.

The typical rate on the favored 30-year fixed-rate mortgage climbed to six.93%, the best level since early July, from 6.91% last week, mortgage finance agency Freddie Mac said on Thursday. It averaged 6.66% throughout the same period a yr ago.

Mortgage rates have increased despite the Federal Reserve cutting its policy rate by 100 basis points last yr after kicking off its easing cycle in September. They’ve tracked U.S. Treasury yields, which have surged amid economic resilience and investor worries that President-elect Donald Trump’s proposed policies, including tax cuts, higher tariffs on imported goods and mass deportations, could stoke inflation.

“The continued strength of the economy has put upward pressure on mortgage rates, and together with high home prices, continues to affect housing affordability,” said Sam Khater, chief economist at Freddie Mac. “The shortage of entry-level supply also stays a difficulty, especially for those trying to develop into first-time homeowners.”

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)