Home Values Slow, Turning Housing Market 'Dicey'

NEW YORK (TheStreet) — Consumer confidence rose again last month. But slowing home values could put a dent in that confidence, especially if that slowdown becomes a decline in the final months of 2014.

The Conference Board's confidence index was up to 92.4 in August, up from 90.9 in July. Americans aren't necessarily taking the long view on the economy, but, with the exception of household income, they do like what they see in the short term.

"Consumer confidence increased for the fourth consecutive month as improving business conditions and robust job growth helped boost consumers' spirits," says Lynn Franco, director of economic indicators at the board. "Looking ahead, consumers were marginally less optimistic about the short-term outlook compared to July, primarily due to concerns about their earnings. Overall, however, they remain quite positive about the short-term outlooks for the economy and labor market."

But if Americans see the value of their homes slow down, that could be a game-changer for consumers. Homes represent one of the largest — if not the largest — investment they own.

Read More: Home-Flippers Take Breather Even as Mortgage Rates Decline

Home sales were down by 3% in July and are down 12% on a year-to-year basis, according to RealtyTrac. July's numbers represent the third consecutive month in which home sales are down on a year-to-year level.

Median home prices are up 3%, but home values have slowed in 65% of the nation, RealtyTrac says, as more purchases of pricier homes have hidden weaker pricing activity in midsize and smaller homes.

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