How Mortgage Rate Hikes Could Help or Hurt Your Chances of Buying

Higher rates also might put a damper on bidding wars, said Jason Lanyard, of Stribling, who works with many investors who've been snatching up 2-bedrooms condos in the $1.5 million range, which they then rent out.

"I have buyers looking down to the decimal point in terms of profit," said Lanyard, who believes these buyers might be forced out of the market, along with many first-time buyers, if rates increase. "It's not that they don't trust that the properties are going to appreciate. It's that they need to be cash positive."

Still, since there's a deep well of foreign buyers paying all cash, Lanyard doesn't expect prices to plummet.