Housing Market Shrugging Off Rise in Mortgage Rates Gary Cameron/Reuters The latest housing data showed upward momentum in both prices and sales. Construction is also up. Mortgage rates may be inching up, but they have not put a damper on the American housing market's rebound. The Standard & Poor's Case-Shiller home price index on Tuesday showed a 12 percent increase in prices in 20 cities from April 2012 to April 2013, the largest gain since early 2006, when home values began to level off in advance of the market collapse. The rate of new-home sales also picked up to its quickest pace since July 2008. The gains added to months of stronger showings in housing, a market that can infuse the economy with spending on big-ticket items like furniture and dishwashers. But the data released on Tuesday covered a period before comments last week by Ben S. Bernanke, the chairman of the Federal Reserve, caused a further jump in interest rates, raising fears that the market's momentum could stall. On Tuesday, many housing experts shrugged off that concern, noting that the effect of a single factor like mortgage rates would be tempered by other forces like prices, wages and changes in employment. Moreover, any rise in interest rates could cut both ways, with some potential buyers encouraged to try to make a deal sooner to get ahead of further increases. For now, though, the biggest factor in the market, real estate agents say, is a low number of homes for sale, and that did not change after the Fed's announcement. "For our low-$100,000 buyer, it's almost impossible to find a house right now," said Renae Jackson, an agent in Houston, recounting a flurry of bidding wars. She acknowledged that if mortgage rates increased too much it would cause a pullback, but said she believed "whoever it is" that controls interest rates would be cautious. "I don't think they're going to take it that high that fast - they don't want to see the economy crash again," she said. Mortgage rates are not specifically under the control of the Federal Reserve, and they are subject to a wide variety of market forces. But they remain near historical lows and home prices are still well below their peaks in most markets, meaning that housing is still relatively affordable for many Americans. Stuart A. Miller, the chief executive of the Lennar Corporation, one of the country's top home builders, credited recent gains to an improving economy, pent-up demand and a severe housing shortage after so little was built during the recession. "Inventories are low for both new and existing homes, as well as for rentals," said Mr. Miller, whose company reported a 53 percent rise in revenue in the second quarter compared with the same period a year earlier. The monthly payment math continues to push families to find a way to purchase. Home values are 11.7 percent below their peak in the mid-2000s, according to a home price report by the Federal Housing Finance Agency that tracks mortgages, and more than 25 percent below their peak according to Case-Shiller, which includes all-cash purchases in its calculations. If mortgage rates rise to 4 percent by the end of the year, as the Mortgage Bankers Association forecasts, they will still be much lower than the rates most Americans have experienced over the last few decades. In May, the average interest rate on a 30-year fixed mortgage stood at 3.5 percent. For budget-conscious buyers, a return to a more historically normal 6 percent interest rate would make a significant difference. The monthly payment on a $300,000 mortgage would be about $460 more at 6 percent than at 3.5 percent. But such buyers could still turn to alternatives like adjustable-rate mortgages. Leah Berk, a business school student who is searching for a condo in the popular Boston-area town of Brookline, said she was much more concerned about finding the right property than about rising mortgage rates. "I'm really at the beginning of my search, so I'm not looking at the interest rates super-duper carefully," she said. My parents, when they bought their house 30 years ago, the interest rates were 17 percent. So with that in mind, if I can get an interest rate that's 4 or 4.5 percent, that's fine.