US Chamber economist says rising interest rates won't derail housing recovery

Purchases are driven by a broader combination of factors such as a borrower's income, his or her ability to make a down payment and the availability of credit, which are all "starting to exhibit more normal behavior," he said. 

Still, the numbers being churned out by the industry "suggests that housing still has a ways to go." 

Rates on 30- and 15-year fixed-rate mortgage rates fell slightly this week to 4.51 percent from 4.58 and to 3.54 percent from 3.6, respectively. 

Housing is a bright spot amid what Regalia deemed a still "moribund" economic recovery. 

The Commerce Department said on Thursday that the economy expanded at a 2.5 percent pace in the April-June quarter, which was revised up from 1.7 in the first estimate last month.

While Regalia acknowledged that the change was "good," the lack of a strong showing in consumer spending reflects that this figure is "not a harbinger of better or robust times to come."

The recession officially ended in June 2009, and the economy has gone through a "lackluster" and "very abnormal economic cycle" since then, he said. 

Despite the pessimism, Regalia anticipates that as the economy continues improving, growth rates could hit 3 percent by the end of the year and into 2014, especially if the housing recovery holds its own amid outside forces. 

The two major factors working against those gains are the Federal Reserve's expected tapering of its $85 billion in monthly stimulus next month and the ballooning costs of entitlement programs over the next decade. 

"Both could be very damaging to our long-run rates of growth," Regalia said.  

"We have to get our entitlement programs under control if we expect them to be in existence down the road."  

The recovery's upward march also hinges on oil prices remaining stable amid unrest in the Middle East and continued energy exploration here, he said.