Homebuying has remained "pretty strong" despite higher mortgage rates, but the refinancing business has dropped "quite a bit," Bank of America CEO Brian Moynihan told CNBC in an interview that aired Friday on "Squawk Box."
"The purchase piece has been pretty consistent, which is important," but refi demand has been moving dramatically lower in the second and third quarter, Moynihan explained. BofA has already said it plans to layoff as many as 2,100 employees from its mortgage business.
This week, home loan rates continued to hover around two-year highs. But they did drop a bit, with the average cost of a 30-year fixed-rate loan coming in at 4.5 percent.
(Read more: Mortgages: To lock or not to lock?)
"The higher interest rates will affect more first-time buyers," Mark Kiesel, Pimco's global head of corporate bonds, told "Squawk Box" on Friday. He follows housing trends by looking at debt opportunities among the big home-building companies, such as Toll Brothers.
This week, Toll Brothers CEO Douglas Yearley said he'd take a 4.5 percent to 5.5 percent mortgage rate in a good economy because from "2000 to 2006, which was a roaring time for housing, rates were 5.5 percent to 8 percent." Rates, even at current levels, are still historically cheap.
In May, mortgages hit a low of 3.35 percent, but have been climbing since then, along with bond yields, during a summer dominated by talk about when the Federal Reserve might start to taper its $85 billion-a-month debt purchases—a program put in place to help boost the economy.
(Read more: No Fed taper this year, says former Bush advisor)
The Fed surprised investors on Wednesday after its September policy meeting by announcing no change in that bond-buying pace.
Moynihan said he took the non-taper to mean that Fed Chairman Ben Bernanke is worried about economic growth slipping back in "the wrong direction."
One way to prevent that is to keep mortgage rates low, which can help housing, added Moynihan, who was interviewed by CNBC with billionaire investor Warren Buffett at Georgetown University in Washington, D.C., before they addressed a student forum on Thursday.
(Read more: Debt ceiling fight 'damn dumb,' says Warren Buffett)
Another factor that could help housing, according to Pimco's Kiesel, is what he describes as a land shortage. "There's more demand for homes where people want to live, than there are of supply of land and houses."
Kiesel said that's pushing home values higher. Home builder KB Home saw its prices up "25 percent year over year," he explained, while "Toll Brothers prices were up 13 percent year over year."
—By CNBC's Matthew J. Belvedere. Follow him on Twitter @Matt_SquawkCNBC.