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

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

Mortgage rates have increased despite the Federal Reserve cutting its policy rate by 100 basis points last year after kicking off its easing cycle in September. They have 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 along with high home prices, continues to impact housing affordability," said Sam Khater, chief economist at Freddie Mac. "The lack of entry-level supply also remains an issue, especially for those looking to become first-time homeowners."