New home sales take sharp drop in July

The average rate on 30-year and 15-year fixed-rate loans hit a two-year high last week. 

The 30-year loan popped up to 4.58 percent, an increase from 4.40 percent, while the 15-year fixed loan hit 3.60 percent up from 3.44 percent — the highest levels since July 2011. 

Rates have risen a percentage point in the past few months on more talk that the Federal Reserve will start tapering its massive stimulus as early as next month. 

There has been growing concern that higher mortgage rates could slow the housing market’s recovery but rates are still near historic lows. 

Many economists argue that despite some negative ripple effects through the housing market because of the rising rates that pent up demand, low rates and banks expanding their lending will keep the recovery moving forward.