While mortgage rates have shot higher during the past six months, buying a home is still an attractive proposition, says Mark Kiesel, global head of corporate bond portfolio management at Pimco.

The average 30-year fixed mortgage stood at 4.16 percent Nov. 7, compared with an average of 3.54 percent for May, according to Freddie Mac. Meanwhile, existing home sales dropped 1.9 percent in September from August, according to the National Association of Realtors.

"Higher mortgage rates definitely hit demand. There's no question about that," Kiesel, Morningstar's fixed-income manager of the year for 2012, tells Yahoo.

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"But overall, affordability is still quite attractive right now."

Kiesel says that while mortgage rates have risen, they haven't curbed demand too much, given that they're still quite low in historical terms.

Demand is particularly strong "in places where there are jobs and people want to live," he explains. In those cities, supply is falling and demand isn't. "There's more demand than there is supply right now."

Home prices and mortgage rates were lower 12 to 18 months ago. "However, if you look at long-term averages, affordability is still quite attractive," Kiesel notes.

"Housing looks cheap in the U.S. versus international markets and there's a lot of pent up demand. Near term, the direction is still higher in terms of prices."

Still, some experts express concern about the housing market.

“We see a little bit of a bumpy ride,” Kevin Cummins, an economist at UBS Securities, tells Bloomberg.

"The jury is still out on home sales and how much of a pullback we might see due to higher mortgage rates."

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