Soaring new home sales: Not what they seem

“I think it built up some pent up demand,” said Alan Laing, CEO of Pennsylvania-based Orleans Homes. “We saw immediately after the resolution, traffic and sales got better in the second half of October.”

The short drop in mortgage rates may not, in fact, have had as much of an impact on sales as some think. Lower prices may have. The median price of a new home sold in October was $245,200, a drop of 1 percent from a year ago. While that may not seem like a lot, it is the lowest monthly median since November of 2012. Prices have been going up dramatically on an annual basis for both the builders and for existing home sales.

(Read more: Looking to move? The Census has an app for that)

The mortgage rate card can actually be played both ways. Steven Alloy, president of Virginia-based Stanley Martin Homes, said rising rates will drive more home sales, not less.

“If you are somebody considering buying a house, one of your great fears is that rates go up, so if they start to move, people will start to believe that they will keep moving, and as soon as they believe they are going keep moving they are going to come out in droves,” he said.

(Read more: Robert Shiller on housing: Don’t trust momentum)

Mortgage rates have jumped dramatically in just the last week on positive economic data. The average rate on the 30-year fixed conforming loan hit 4.51 percent last week, according to the Mortgage Bankers Association, but are already higher today. Should the monthly jobs report released on Friday be better than expected, interest rates will surge ever higher.

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