NEW YORK — Record-low mortgage rates failed to pull the housing market out of its funk. Now rates are inching higher, but don't blame them if home sales stay sluggish.

Just as bargain financing couldn't save the housing market, analysts say, a gradual rise in rates won't necessarily crush it. Cheap money matters less than the larger forces at work, especially a 9.6 percent unemployment rate, which keeps would-be homebuyers in fear of losing their next paycheck.

Michelle Girard, senior economist at the Royal Bank of Scotland, said the lack of confidence about the U.S. economy is what is hurting the housing market.

On Thursday, Mortgage buyer Freddie Mac said the average rate for a 30-year fixed loan was 4.35 percent, the first weekly rise since mid-June. That's up from 4.32 percent the previous week, the lowest number since Freddie Mac began tracking rates in 1971. Rates have been falling since spring as investors have shifted money into safe Treasury bonds. That influx of money has lowered Treasury yields, which mortgage rates tend to track.

Even the lowest interest rates in memory couldn't entice buyers from the sidelines. The National Association of Realtors reported sales of previously occupied homes plummeted 27 percent in July.