"If sustained, the rate increase will take some of the steam out of the housing market," said Mark Zandi, chief economist at Moody's Analytics.
The sudden jump in rates is driven by uncertainty over whether the Federal Reserve's economic stimulus program, called quantitative easing, will continue, according to Keith Gumbinger of HSH.com, a mortgage information provider.
"The aftermath of the Fed meeting and Mr. Bernanke's remarks ... about the future of QE continue to roil markets," Gumbinger said.
While the recent rise in rates has homebuyers on high alert, it might not be enough to cool the housing market. Home prices have risen 12% but are still about 28% below their 2006 peak. And, despite the recent spike, rates are still well under historic norms.
"Rates are still reasonable," said Zandi. "Going from 3.5% to 4.5% is not helpful, but it's not enough to make a big difference."
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