Despite continued fears (typical quote: "the sales pace will likely come down as a result of the surge in mortgage rates." –Ted Wieseman, Morgan Stanley), the backup in T-bond yields is not likely to derail the U.S. housing market. Current rates on 30-year fixed-rate conforming mortgages are up by three-quarters of a point from their recent all-time lows. Rates on jumbo mortgages are at their lowest level in three and a half years. Not a big deal. Indeed, buyers on the fence should view this as a good reason to act now before rates go higher.
I should also mention that the narrowing of the gap between conforming and jumbo rates is a very good sign, since it means that the mortgage lending business is functioning in a more normal fashion.