Mortgage rates climbed for the fourth consecutive week, reaching the highest level since the start of the pandemic.

The average for a 30-year loan was 3.56%, up from 3.45% last week and the highest since mid-March 2020, Freddie Mac said in a statement Thursday.

Rates followed a recent jump in yields for 10-year Treasuries. Borrowing costs may continue to increase as the Federal Reserve eyes a rate hike to dampen surging inflation.

That could put the American dream of owning a home further out of reach for those already struggling to find affordable options. Rates plummeted to a record low roughly a year ago, and cheap borrowing costs have helped fuel a red-hot housing market that’s pumped up real estate prices.

The average rate on 15-year, fixed-rate mortgages, popular among those refinancing their homes, jumped to 2.79% from 2.62% last week.

“As a result of higher mortgage rates, purchase demand has modestly waned in advance of the spring homebuying season,” Sam Khater, Freddie Mac chief economist, said in a statement. “However, supply remains near historically tight levels and home prices remain high.”

Still, borrowing costs may level off in the coming weeks, according to Keith Gumbinger, vice president at mortgage-information company HSH.com.

“We’re starting to see signs that we might be topping out on rates,” Gumbinger said in an interview. “The Federal Reserve has made a bit of a shift, but it’s not clear if the shift has completed yet.”

Mortgage rates have been expected to rise this year after the Federal Reserve announced last month that it would begin dialing back its monthly bond purchases — which are intended to lower long-term rates — to slow accelerating inflation. But even with the expected three or four rate increases in 2022, the Fed’s key rate would still be historically low at around 1%.

Last week, the government reported that inflation spiked to 7% in December from a year earlier, the sharpest such increase in four decades. In addition, the Labor Department reported that prices at the wholesale level surged by a record 9.7% last month from December 2020.

In addition to surging inflation, experts expect robust economic growth and the tight labor market to continue to push rates higher.

Freddie Mac economists expect the higher mortgage rates to bring a modest decline in purchasing demand ahead of the spring homebuying season. They note that the supply of homes available for sale remains tight and prices are still high.

Available housing has been in short supply since long before the pandemic started, and prices have risen close to 20% over the past year. Higher mortgage rates could make it even harder for homebuyers to secure a new home.

New data released Thursday showed that sales of previously occupied homes fell in December for the first time in four months as many would-be buyers were frustrated by a lack of available homes — which fell to the lowest level in over two decades.

Bloomberg and Associated Press contributed to this report.