We are at the endgame for housing. Until recently, our national motto has been “in real estate we trust.” Just last week, the Census Bureau reported that median home prices after inflation rose 32% from 2000 to 2005. In some places, the gains were huge: 127% in San Diego, 110% in Los Angeles, and 79% in New York. But real estate — which has acted as a national piggy bank, with homeowners borrowing and spending against rising house prices — no longer looks so trustworthy. On this, more than falling oil prices or a record Dow, hangs the economy’s immediate fate.

The boom sowed its own destruction. Coupled with modestly higher interest rates, rising home values have priced more potential buyers out of the market. In 2003, a family with an income of $40,320 could buy the median-priced existing home of $180,200, estimates the National Association of Realtors. By August 2006, an income of $56,544 was required to buy the median-price home, now costing $225,700. (The assumptions: Purchasers make a 20% down payment and devote 25% of their income to mortgage payments at the prevailing interest rate.)

With fewer buyers, home construction and sales and prices have weakened. In August, housing starts were 20% lower than a year earlier. Last year, sales of new and existing homes totaled almost $8.4 million; next year the National Association of Realtors expects $7.4 million. Construction workers, real-estate agents, and mortgage bankers will lose jobs. Consumer spending will also suffer, as the borrowing and buying against rising real-estate values subsides. Indeed, the end of the cheap credit that fed the boom means that many borrowers will face higher monthly payments.

Adjustable rate mortgages represent a quarter of the nearly $10 trillion in single-family mortgages, Michael Fratantoni, an economist at the Mortgage Bankers Association, said. Adjustable rate mortgages typically change rates annually and are 2 to 2.5 percentage points above, say, a one-year Treasury note. But “hybrid” adjustable rate mortgages made in 2003 and 2004 provided low fixed rates for three to five years; many of these rates are now rising. Consider a borrower with a 4% adjustable rate mortgage of $200,000 lent in 2003. The monthly payment had been $955, Mr. Fratantoni said. Now, the mortgage would reset at 7.5%; the payment increases to $1,362. Switch to a 30-year fixed-rate loan, and the rate would be 6.25% with a $1,164 monthly payment.

To service their loans, some consumers will curb their shopping. Susan Sterne of Economic Analysis Associates said that debt payments will absorb a record 15.6% of personal disposable income in 2007. Ms. Sterne expects growth in consumer spending and the overall economy to weaken, though she’s not predicting a recession. But some forecasters think one is possible.

Uncertainties abound. How much will falling oil prices cushion consumer spending? More important: How much do higher home prices reflect a temporary speculative “bubble”? Among experts, there’s a wide range of views. Economist Richard Green of George Washington University thinks much of the runup of home prices is permanent, reflecting lower long-term interest rates. As rates dropped, buyers could afford to pay more. I largely agree with this view. Growing confidence in low inflation has gradually reduced long-term rates. In 2005, rates on 30-year fixed-rate mortgages averaged about 6%, compared with 7.5% in 2000 and 8% in 1995. Restrictive zoning regulations have also pushed up prices in some areas, Mr. Green said. High demand pressed on a limited housing supply.

Still, evidence of speculation is undeniable. For a while, there was a buyers’ panic. By one survey, about 40% of houses bought in 2005 were second homes (28% for “investment,” 12% for “vacation”). Dubious new mortgages — interest only or less — aimed to maximize what a buyer could afford. A survey by Global Insight and National City Corp. estimates whether home prices in 317 metro areas are reasonable. In early 2000, 63 metro areas were judged overvalued — but by no more than 13%. In mid-2006, 236 were thought overvalued, and 79 by more than 34%. The survey considers interest rates, local incomes, and housing densities.

Even a leveling of home prices suggests that Americans will save more from current income and spend less. Up to a point, that’s okay, especially if the lost spending were offset by higher exports and business investment. But one recent survey shows a year-over-year price decrease for existing homes of 1.7%. Moody’s Economy.com forecasts falling prices in 100 metro areas and an average decline of 3.5% next year — the first annual drop since the Great Depression, Mark Zandi, a chief economist, said. There’s the endgame’s true danger: If prices drop too much or too persistently, the damage to confidence and spending won’t be easily neutralized.