Newly confident consumers are driving up the price of homes, but will higher interest rates slow sales?

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POSTED: Sunday, June 2, 2013 - 4:00pm

UPDATED: Sunday, June 2, 2013 - 4:04pm

Mortgage rates are on their way up for the first time in years.

Still, the rising rates come amid all kinds of other good economic news.

New surveys find Americans as optimistic now as they were before the recession.

They're buying more, including more U.S. made cars.

There's stronger job growth, and U.S. pork is so popular a Chinese firm is buying Virginia's Smithfield Foods, the world's largest pork producer.

The $4.7 billion deal keeps U.S. plants open.

The stock market has been rocketing up, so retirement accounts are recovering, and home prices are rising faster than they have since 2006.

Still, borrowing the money to buy is costing more.

Home mortgages rates are up to 4 percent, from 3.7 percent in December.

That will hurt homes sales, even though it helps a bit in the short term.

"Short term...you have fence sitters and you've got to get that rate before it goes up, so they jump in and they buy," explains CNBC's Diana Olick. "They lock in. In the long term it takes away purchasing power from your average home buyers."

  

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