By Chris Isidore
NEW YORK (CNNMoney) -- The rise in home prices continued to accelerate in April, but a jump in mortgage rates could soon put the brakes on prices.
The S&P/Case-Shiller home price index was up 12.1% in April, compared to a year ago, in the 20 top real estate markets across the nation. That was the biggest annual jump in prices in seven years. Prices climbed 2.5% from March, posting the biggest one-month rise in the 12-year history of the index.
A drop in foreclosures, coupled with a tight supply of homes for sale and mortgage rates that hit record lows, have fueled the rebound in prices over the last 11 months.
But the 30-year mortgage rate has risen to nearly 4%, up from 3.35% at the start of May. While that is still low by historical standards, it's trimmed about $12,000 off of an average buyer's purchasing power. Mortgage rates began to climb in May, after April's sharp jump in home prices was recorded.
"Home value appreciation in some of these areas will have to slow down, or potentially fall, as higher prices are no longer masked by rock-bottom mortgage rates," said Stan Humphries, chief economist of home price tracker Zillow.
Indeed, the rapid rise in home prices that's fueling the housing recovery could actually help derail it, as it makes purchases more difficult for potential buyers. Even the National Association of Realtors warned last week that "home price growth is too fast," and said that the market needs significantly more home building and better access to credit for buyers.
"In general, the national housing recovery is strong and sustainable, but pockets of volatility will emerge," said Humphries. "Buyers expecting home values to continue rising at this pace indefinitely may be in for a shock."
The government will issue a report on new home sales later Tuesday morning, and economists surveyed by Briefing.com expect to see another rise in the pace of new home sales.