It's been a month since rates fell!

Mortgage rates have risen for the fourth week in a row as investors gradually realize that the Federal Reserve is going to keep raising interest rates.

The benchmark 30-year fixed-rate mortgage rose 6 basis points to 5.84 percent, according to the Bankrate.com national survey of large lenders. A basis point is one-hundredth of 1 percentage point. The mortgages in this week's survey had an average total of 0.38 discount and origination points. One year ago, the mortgage index was 6.17 percent.

The 15-year fixed-rate mortgage rose 6 basis points to 5.45 percent. The 5/1 adjustable-rate mortgage rose 9 basis points to 5.49 percent.

It is unusual for a shorter-term rate to be higher than a longer-term rate, but that's the case here: The 5/1 ARM has a higher rate than the 15-year fixed. Nevertheless, ARMs increased in popularity last week, according to the Mortgage Bankers Association and accounted for 29.4 percent of applications.

Four weeks ago, the average rate on a 30-year fixed was 5.61 percent. Then, on June 30, the Fed raised the federal funds rate by a quarter of a percentage point for the ninth time in exactly a year. Long-term mortgage rates rose after that and kept going up. Believe it or not, that's a mild surprise, at least to some observers.

This monthlong rate rise is unusual because of what happened during the year prior, when the Fed kept raising short-term interest rates, but long-term rates fell. The prime rate went from 4 percent to 6 percent, while the average rate on a 30-year fixed mortgage dropped from 6.3 percent to 5.61 percent, according to Bankrate's national survey.

The Fed didn't want or expect long-term mortgage rates to drop while it was raising short-term rates. According to conventional wisdom, long-term rates fell because the Fed's rate increases were seen as anti-inflationary. Fed Chairman Alan Greenspan didn't fully buy that theory, and he labeled the behavior of long-term rates a "conundrum."

Finally the central bank gained traction after the ninth, and most recent, short-term rate increase, on June 30. The prime rate rose to 6.25 percent and mortgage rates went up, too. In testimony before Congress last week, Greenspan made it crystal clear that the Fed intends to keep raising short-term rates, and the upward trend in long-term mortgage rates continued.

Still, rates on 30-year mortgages are about three-eighths of a percentage point lower now than they were a year ago. Meantime, home prices rose briskly. According to the National Association of Realtors, half the homes resold in June cost more than $219,000; a year before, the figure was $191,000. That's an increase of 14.7 percent in a year; if you live on the East or West Coast, your home's value probably rose faster than that.

Falling mortgage rates tempered the sticker shock from the rising prices of houses. After a 10 percent down payment, the monthly principal and interest on a median-priced home went up 6.6 percent, from June 2004 to June 2005, despite the 14.7 percent price jump for the median home. People say low mortgage rates drive home prices higher, and that's why: Lower rates keep the monthly payments down.

"I used to describe it as a red-hot market, then I decided it was white-hot; and now I've run out of adjectives," Jim Gillespie, chief executive of Coldwell Banker Real Estate Corp., said in a recent interview. "There's one adjective that I will not use, and that is 'crazy.' People who say this is a crazy market are wrong because all the fundamentals have been in place for a solid real estate market now and in the future."

Contrast Gillespie's optimism with economist Joel Naroff's alarm. "The housing market remains red-hot and that may no longer be a good thing," wrote Naroff, of Naroff Economic Advisors in Holland, Pa., in a commentary about new home sales (up 14 percent in one year). "There is a difference between a hot market and an out-of-control market. We seem to have moved into the latter category."

According to the Census Bureau, new home sales in June surged to a record annual rate of 1,374,000 units. Half the new homes sold in June cost more than $214,800. That median price is down -- yes, down -- from the previous June, when half the homes cost more than $215,700. The reason? This year, new homes costing less than $200,000 were more popular with buyers.