NEW YORK — It's a tale that sounds so familiar: Low interest rates fuel a housing boom that leads to real estate prices soaring in many areas of the country.

This isn't the story of the U.S. real estate market, though, but what has gone on in Britain in recent years. What's interesting about this tale is that it has reached a chapter not seen here just yet — the ugly side of when sizzling housing prices begin to lose steam.

Worries have been mounting about the U.S. housing market slowing down and the impact that could have on the economy. The problem is that no one knows for sure if, or when, a housing shakeout could come.

Which is why a look across the ocean could be instructive, even though the situation there doesn't exactly match what has gone on here.

As in the United States, British housing prices began their major ascent in the late 1990s and the gains were dramatic. But after peaking last summer, the market has cooled largely because the Bank of England raised its key interest rate five times between November 2003 and August 2004 amid fears that inflation was accelerating, partly because of a housing boom.

New data from Rightmove, which tracks the British property market, shows that there has been zero growth in housing prices over the past year from an 18 percent gain at the height of the expansion in July 2004. The Royal Institution of Chartered Surveyors reported that sales are down 25 percent from a year ago.

All this is bad news for the British economy. As the housing market has slowed, it has hurt consumer spending at the same time that the jobless rate is rising and manufacturing remains sluggish. New data released last week showed that the economy grew at an annual rate of 1.7 percent in the second quarter, the slowest in 12 years.

That is fueling speculation that the Bank of England might begin cutting rates again by late summer in an attempt to re-ignite the economy.

Of course, there is no telling if the United States will follow this script. For now, economic growth looks healthy even though the U.S. Federal Reserve has raised short-term interest rates nine times since June 2004.

Mortgage rates, however, have not moved sharply higher, and that has helped push up sales of existing homes to a new record in June with home prices accelerating at the fastest pace in nearly 25 years, according to the National Association of Realtors. Existing homes were sold at a seasonally adjusted annual rate of 7.33 million units last month, a gain of 2.7 percent from the May sales pace.

And home prices overall have jumped 12.5 percent over the 12 months ended in March, the most recent data available from the Office of Federal Housing Enterprise Oversight.

Even if the housing market should slow, there are plenty of reasons why a pullback here could turn out more moderate than what they have experienced abroad.

To start, British home prices are up 149 percent on average since 1997 while U.S. home prices overall have appreciated a more modest 76 percent during the same period of time, according to Morgan Stanley's chief U.S. equity strategist Henry McVey.

In addition, British mortgages, according to McVey, are either at variable rates or at fixed rates that last for only around two years, so mortgage costs are more significantly affected by interest rate moves. Contrast that with the U.S. mortgage market, where 30-year fixed mortgages represent more than two-thirds of those issued and most adjustable rate mortgages have longer fixed periods — three to 10 years — than that seen in Britain.

Also working to the advantage of U.S. homeowners is that they seem less inclined to spend as their housing wealth increases. Working off a study by the Organization for Economic Cooperation and Development, McVey estimates that a British resident would spend $7 if her house price increased by $100 while a U.S. resident would only spend $5.

Still, McVey warns, the nationwide U.S. averages might not tell the whole story — namely that there are plenty of risks in regional housing markets like in the West and East Coasts where prices have risen to comparable levels as those seen in Britain.

He also points to other things to watch out for. Any significant increase in interest rates could crimp affordability for many home buyers and a rise in unemployment could make it more difficult for many to service their debts.

Fed Chairman Alan Green-span has issued his own warnings about the fast-growing housing market, most recently expressing heightened concern about "speculative fervor" in some areas of the country.

Greenspan also has warned that using risky types of mortgages, such as interest-only mortgages, could leave home buyers "vulnerable to adverse events" if house prices begin to fall.

What happens next in the U.S. housing market is anyone's guess. Maybe the British experience foreshadows what's to come, maybe it doesn't. It is still worth understanding the potential risks that lie ahead.