For the first time in several years, the real estate market is a lagging part of the economy.

For some time, the real estate market has led the economy forward, but in the past year or so, the economy has outshined the real estate sector. In most times a stronger economy helps real estate, but this market is a bit different than most. Real estate's recovery from the recession was fueled by record low interest rates.

And though it is not unusual for rates to rise as the economy gets better, today's rates seem higher than they are in reality. Rates are lower now than they have been for most of the past three decades, but consumers have become used to unbelievably low rates. On the other side of the equation, home prices have risen even with slower home sales because there has been a lack of inventory. Together with rising rates, higher home prices have increased homeownership costs. Now it appears as though inventory levels are rising in certain sections of the country, while at least stabilizing in other areas. 

What will more inventory mean? With higher rates and more inventory available, this should mean that the rise of home prices might slow down. Consumer rents also have risen steadily for the past several years. Higher interest rates will continue to contribute to the higher cost of renting, even if home price growth slows. After all, rent money goes to pay the landlord's loan. What could halt the rise in rates? If higher rates also cause the broader economy to slow, in addition to the real estate sector, that could do the trick. Stocks have been very volatile lately and that could be a warning sign that the cooling is about to begin.