It will cost you a lot more to take out a 30 year fixed rate mortgage than it did in the spring. So what does that mean for housing? Source:

One of the better tailwinds for the economy in 2013 has been a housing industry that is finally expanding. More homes are being built, more are being bought and sold, and they are trading at higher prices than they were this time a year ago.

But how dependent has that improvement been on ultra-low mortgage rates? And how much damage will the run-up in rates since the start of May do to the housing recovery?

We will get some important pieces of evidence on these questions Tuesday morning.

As the chart above shows, the average 30-year fixed rate mortgage soared from 3.4 percent at the start of May to hover around 4.5 percent or so since mid-June (the high was 4.67 percent on Sept. 5). Assuming a person was buying an average priced U.S. home (about $319,000) with 20 percent down, that means that the monthly mortgage payment has risen 14 percent. That will inevitably put pressure on home sales activity, prices, and construction activity.

But when and how higher rates will affect those different parts of the housing market is less certain--as is the question of whether this housing recovery is robust enough to take the hit and continue nonetheless.

For example, people who struck deals to buy houses in the spring, before the rate rise, typically wouldn't have closed on those houses until summer. Some home sales activity and prices would be expected to only be affected with a lag. Similarly, homebuilders may have waited to see the impact on purchase activity and prices before adjusting their plans for construction. Finally, when rates first were spiking, some buyers may have rushed into the market to get in while the getting was good, distorting the numbers.

First, for home sales, the evidence out of a report Monday was bad news. The number of pending home sales--transactions agreed to but not yet completed--actually fell 0.6 percent in October, the National Association of Realtors said, contrary to the 1 percent increase analysts had expected. That's a pretty good hint that buyers pulling back from the market.

As for homebuilding activity, the Commerce Department will report first thing Tuesday morning on the number of housing permits issued in both September and October (a released delayed due to the government shutdown). This double dose will give us a good forward-looking sense of how much construction activity will be occurring in 2014--and whether the summer run-up in rates made builders panic. Already, the rate of permits has shifted downward, from a 1.005 million annual rate in April to 926,000 in August. The question now is whether that trend continued in September and October.

Finally, home prices. It stands to reason that homebuyers dealing with higher rates wouldn't be able to offer as much for a house, putting downward pressure on prices. The S&P/Case-Shiller home price index for September will give a sense of whether that effect has been powerful enough to depress prices thus far.

Analysts are expecting home price increases to have continued in September, with an 0.9 percent gain forecast and prices up 13 percent in 20 major cities over a year earlier. But a miss would be a sign that higher borrowing costs are already coming at a cost of lower prices.