The average home price in 20 major cities rose 12.1 percent over a 12 month period ending in June, according to the S&P/Case-Shiller Home Price Indices, a leading measure of the U.S. real estate industry. But this trend may be coming to an end as the increase in home prices appears be slowing partly due to rising mortgage rates. But the bigger picture sheds light perhaps on a more difficult issue.

Through June, the data from 20 major cities was very similar to the U.S. as a whole. In fact, CoreLogic, a provider of real estate information, said “Home prices nationwide, including distressed sales, increased on a year-over-year basis by 11.9 percent in June 2013 compared to June 2012.” But the 3o-year fixed-rate mortgage, according to Freddie Mac, rose a full point from 3.59 percent on May 23 to 4.58 percent on August 22. And this may be enough to apply housing brakes.

Although the housing market had shown signs of improved health through recent months, 10.4 million or 21.5 percent of all American residential home owners with mortgages had negative equity at the end of last year, according to the latest data from CoresLogic. This means they owed more on their mortgages than their homes were worth.

The Tampa-St. Petersburg-Clearwater area performed the worst, with 44.1 percent of homeowners under water.

How did the states compare? Nevada had the highest percentage of mortgaged properties in negative equity at 52.4 percent, Core Logic says. This was followed by Florida, at 40.2 percent, Arizona, at 34.9 percent, and Georgia, at 33.8 percent. And compared to American metropolitan areas, it’s no surprise that the Tampa-St. Petersburg-Clearwater area performed the worst, with 44.1 percent of homeowners under water.

But the most striking data may be this: the total value of residential new-builds in 2012 were about half of what they were in 2005, the year of highest values, the Bureau of Economic Analysis data indicates. This suggests a very long road back to where we once were.

The overall decline in new builds, which has translated into a deterioration in the largest assets of many, reduced the wealth of millions of Americans. And it’s difficult to remain confident and spend money on consumer goods when your largest asset has lost significant value.

What’s ahead? No one knows. Nevertheless, many economists indicate that home prices likely will continue to rise, but at a slower pace than before. But a major problem — getting back to the 2005 new-builds rate — may be like digging out of the Grand Canyon.

About The Author Christopher Manzella

Based in Tampa, Florida, Christopher Manzella is a columnist on real estate, and a licensed real estate agent with expertise in property management and home renovation.