WASHINGTON (Reuters) – U.S. mortgage rates rose to a new six-month high this week, a trend that coupled with high home prices could further squeeze potential buyers from the market.

The average rate on the popular 30-year fixed-rate mortgage rose to 6.93 percent, the highest level since early July, from 6.91 percent last week, the agency said Thursday Freddie Mac mortgage financing. It was an average of 6.66% during the same period a year ago.

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

“The continued strength of the economy has put upward pressure on mortgage rates and, along with high home prices, continues to affect housing affordability,” said Sam Khater, chief economist at Freddie Mac . “The lack of entry-level supply also remains an issue, particularly for those looking to become first-time homeowners.”

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)