Shiller: Rising rates will hurt home prices

Mortgage rates rising from their record low levels probably will affect the housing recovery, but how?

It depends on whom you ask.

To economist Robert Shiller, the threat of rising rates will negatively affect housing prices because it's about perception, he said on CNBC's "Closing Bell."

(Read more: US existing-home sales jump to 3-year high)

"Once people think that rates are up, there won't [be this] impetus to demand anymore," Shiller said, adding that rising rates pose a threat to detached, single-family homes, especially in suburban communities, because "people are not so positive" about ownership after the housing bust of 2007-09.

The futures market points to year-over-year increases for home prices in the next five years, but Shiller isn't buying it.

But Toll Brothers CEO Douglas Yearley expressed little concern about higher rates, at least in terms of housing starts and new construction.

(Read more: Housing starts miss; Q2 productivity beats)

The rise doesn't seem to be affecting his business or customers, he added, but the home builder caters to high-end buyers, with its average unit priced in the $600,000 range.

Twenty percent of Toll Brothers clients do all-cash transactions, and most of the rest finance only 70 percent of their home purchase, making a notch up in rates almost a nonissue, Yearley said.

"We're in the early stages of this recovery, and I just don't see mortgage rate movement derailing what's going to happen for us," he said. Though a steep increase in rates would be detrimental, he doesn't expect that.

Faced with tight inventory and a demand backlog, Yearley said, he's "very optimistic" about next year.

—By CNBC's Drew Sandholm. Follow him on Twitter @DrewSandholm