LOS ANGELES (AP) — The average long-term U.S. mortgage rate climbed this week to just under 7%, the highest level since November and the latest setback for homebuyers already grappling with a tough housing market constrained by a dearth of homes for sale.

Mortgage buyer Freddie Mac said Thursday that the average rate on the benchmark 30-year home loan rose to 6.96% from 6.81% last week. A year ago, the rate averaged 5.51%.

It's the third consecutive week of higher rates, lifting the average rate to its highest level since it surged to 7.08% in early November. High rates can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market already unaffordable to many Americans.

The latest increase in rates follows a recent sharp upward move in the 10-year Treasury yield, which climbed above 4% last week for the first time since early March. The yield, which lenders used to price rates on mortgages and other loans, was down to 3.80% in midday trading Thursday following new data pointing to cooler inflation, which led bond traders to trim bets for more rate hikes by the Federal Reserve later this year.

On Wednesday, the U.S. government reported that inflation at the consumer level rose 3% in June from a year earlier, marking its lowest point since early 2021, though it remains above the Fed's 2% target.

"Incoming data suggest that inflation is softening, falling to its lowest annual rate in more than two years," said Sam Khater, Freddie Mac's chief economist. "However, increases in housing costs, which account for a large share of inflation, remain stubbornly high, mainly due to low inventory relative to demand."

High inflation has driven the Federal Reserve to jack up interest rates at a blistering pace. Beginning with its first hike in March 2022, the central bank has lifted its benchmark interest rate to about 5.1%, its highest level in 16 years, before forgoing a hike at its meeting of policymakers last month.

Mortgage rates don't necessarily mirror the Fed's rate increases, but tend to track the yield on the 10-year Treasury note. Investors' expectations for future inflation, global demand for U.S. Treasurys and what the Fed does with interest rates can influence rates on home loans.

The average rate on a 30-year mortgage remains more than double what it was two years ago, when ultra-low rates spurred a wave of home sales and refinancing. The far higher rates now are contributing to the low level of available homes by discouraging homeowners who locked in those lower borrowing costs two years ago from selling.

The dearth of properties on the market is also a key reason home sales have been slow this year. Last month, sales of previously occupied U.S. homes were down 20.4% from as year earlier, marking 10 consecutive months of annual declines of 20% or more, according to the National Association of Realtors.

The average rate on 15-year fixed-rate mortgages, popular with those refinancing their homes, also rose this week, climbing to 6.30% from 6.24% last week. A year ago, it averaged 4.67%, Freddie Mac said.