rates go higher because more people are working. More people working mean more people buying homes. Rates are at historically low rates and people know that the wont last. IF you have a job and you want a house, you will buy.
Easy as that. Inventory levels are at historic lows. New construction is coming back and 2014 will be the first full year that the recover will be in full swing. Sit on the side lines with you short and get your #$%$ kicked in 2014.