A sharp jump in mortgage rates from May to June are now beginning to weigh on the housing recovery. The two-month delay can be attributed to several factors—first and foremost that most potential home buyers lock in mortgage rates early, and sale closings can take up to two months to be finalized.
Second, there may also have been a surge in homebuying because of the rise, as those on the fence suddenly jumped in, fearing rates would continue going up and they would be priced out of the market. Those factors have now expired.
"We saw an increasing number of comments suggesting the sharp rise in mortgage rates has led to a pause in demand, with many agents saying the initial urgency they saw from buyers as rates moved higher has subsided and now buyers are stepping back to re-evaluate their options," said analysts at Credit Suisse in their monthly survey of real estate agents. They noted a drop in buyer traffic in July, the first time since last December that it didn't exceed expectations.
(Read more: Map: Tracking the US real estate recovery)
While buyers may be pausing, however, their optimism is not. Americans are increasingly hopeful about housing's return. Sixty-two percent believe mortgage rates will go up over the next year, according to a new Fannie Mae survey, but 74 percent also say it is now a good time to buy a house, an increase in both from June.
(Read more: What you need to know if Fannie and Freddie go)
"Consumers have taken the interest rate rise in stride. Expectations for continued improvement in housing persist, and sentiment toward the current buying and selling environment is back on track from its dip last month," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "These results are consistent with our own analysis of previous housing cycles, which finds that interest rates and home prices are not strongly correlated."
Another survey from home builder PulteGroup found 43 percent of move-up buyers indicating they are planning to buy a new home within the next five years, with 76 percent saying they believe they can sell their current home within the next two years for enough to move up. Pulte targets the move-up buyer.
Mortgage applications to purchase a newly built home rose 14 percent month to month, according to the Mortgage Bankers Association, but new home buyers may be less sensitive to rates, as builders can buy down mortgage rates as part of the deal.
It all prompts the question: With rates still historically low, does a 1 percentage point jump in rates really matter?
"It absolutely matters," said Craig Strent, CEO of Maryland-based Apex Home Loans. It does put people that are on the fringes that were just on the edge of qualification—it does kick them out from qualifying. For those that already did qualify, it's psychological. All of a sudden that house that was going to cost you X, is now costing you another hundred dollars a month in mortgage payments and that does make a difference."
There is also the question of home prices, which continue to rise because of a severe lack of homes for sale. This varies market-to-market, but is especially severe in formerly distressed markets that were targeted by investors.
"We see many threats to the housing recovery," said Jaret Seiberg of Guggenheim Partners. "Rising rates will make homes less affordable. We also are concerned that investors have artificially stabilized some markets and driven prices up beyond what consumers can afford at today's higher interest rates."
—By CNBC's Diana Olick. Follow her on Twitter @Diana_Olick.
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