Freddie Mac, the mortgage company, reported that rates on 30-year, fixed-rate mortgages averaged 6.67 percent, up from 6.62 percent last week.

This week's rate was the highest since the week ending June 13, 2002, when 30-year mortgages were at 6.71 percent.

Rates on one-year adjustable rate mortgages were also up for the week, rising to 5.68 percent. That was the highest point for one-year ARMS since they averaged 5.71 percent in mid-August 2001. Last week, the one-year ARM was at 5.61 percent.

Analysts believe housing will experience a gradual slowing this year, but not a crash as long as the Federal Reserve calls a halt soon to its two-year campaign to push interest rates higher to keep inflation under control.

However, financial markets are worried that the Fed, which has already boosted interest rates 16 times, may keep raising rates rather than pausing as had been hoped in response to signs of growing inflation pressures.

Frank Nothaft, chief economist at Freddie Mac, said he still believes mortgage rates will rise only "slightly higher" for the rest of this year and that the increase will be "gradual and orderly".

Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing a home mortgage, rose this week to 6.26 percent, up from 6.23 percent last week.