Mortgage rates rose to their highest levels in two years with the average rate for a 30-year fixed loan climbing to 4.51 percent and the average rate for a 15-year fixed rate rising to 3.39 percent.
Most analysts predict that even with the mortgage rates rising, the housing market will remain strong. In fact, sales of single-family homes increased in May by 6 percent and home prices have risen by 12 percent since 2006. This is contributed to the limited supply of homes for sale and the increase in Americans back at work.
These increases reflect an expectation that the Federal Reserve Bank may reduce bond measures as they sense a strengthening economy.