(Bloomberg) -- Mortgage rates in the US increased for the third week in a row, squeezing buyers just as a key selling season starts getting underway.

The average for a 30-year, fixed loan was 6.9%, up from 6.77% last week, Freddie Mac said in a statement Thursday.

Potential buyers have been navigating a market that’s become less affordable in recent years as both borrowing costs and prices rose. A lack of homes for sale has also made the hunt even tougher, with fewer options for shoppers.

The Federal Reserve has signaled that its benchmark interest rate has likely peaked, but investors remain cautious about how soon any cuts may start. Minutes from the central bank’s latest meeting show most policymakers remain more worried about the risks of cutting rates than keeping them higher for longer.

“Housing affordability is so low that good economic news equates to bad news for homebuyers, who are sensitive to even minor shifts in affordability,” Sam Khater, Freddie Mac’s chief economist, said in the statement.

A brief dip in borrowing costs in January drove sales of previously owned homes up the most in nearly a year, but transactions are still well below pre-pandemic levels.

“The recent increase in mortgage rates has the potential to slow the market by disrupting the plans of many buyers, especially in a market where a significant number of consumers are anticipating lower mortgage rates, not higher,” said Jiayi Xu, a Realtor.com economist. 

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