Although it has fluctuated somewhat in recent months, consumer confidence remains strong. Reports of continued economic and employment growth have helped sustain consumers' positive outlook about their current and near-term financial well-being.

Consequently, consumer spending and borrowing are on the rise. Normally, that would translate into more consumers entering the housing market. At present, however, the trend is going the other way, with those looking to buy a home feeling less confident about their prospects.

Consumer confidence has declined since the beginning of the year but remains positive and well above confidence levels in recent years. After declining somewhat in June, confidence rose slightly in July.

The Conference Board posted a near five-point gain in overall confidence, as well as a four-point gain in its Present Situation and Expectations indexes. The University of Michigan's Survey of Consumers fell by roughly 1.5 points in July, just slightly off from June's record high, and is well above last July's figure.

Gallup's U.S. Economic Confidence Index crept up a point, slightly above May and June's lowest points for the year to date. However, notes Gallup, July marked the ninth consecutive month that Americans rated the economy more positively than negatively — the longest such streak since Gallup began tracking economic confidence in 2008.

By and large, consumers feel confident that their current jobs are secure and/or that they could find another job fairly quickly if for some reason they were to lose their current job. Consumers also feel fairly secure about their current economic situation, although hopes that rising employment would improve wages are dwindling.

"Consumers' assessment of current conditions remained at a 16-year high, and their expectations for the short-term outlook improved somewhat after cooling last month," said Lynn Franco, the Conference Board’s director of economic indicators. "Overall, consumers foresee the current economic expansion continuing well into the second half of this year."

Despite seeing themselves as more financially secure than they have been for some years, consumers are feeling less optimistic about their ability to purchase a home. Fannie Mae reports its Home Purchase Sentiment Index dropped 1.5 percent in July, after matching its all-time high in June.

"The net share who reported that now is a good time to buy a home fell 7 percentage points, with the share who say it’s a bad time to buy reaching a new survey high and the share who say it’s a good time to buy reaching a new survey low," the report states.

Surprisingly, the net share of those who say it is a good time to sell a home decreased by 11 percentage points, after hitting its highest point ever in June. The biggest reason for the drop, noted Fannie Mae chief economist Doug Duncan, was rising prices, followed by rising uncertainty as to whether anticipated pro-growth legislation will occur this year. In addition, more consumers indicated that their household income was not significantly higher that it was 12 months ago, a reflection of wage stagnation.

Web-based real estate brokerage firm Redfin announced that its latest Housing Demand Index, which covers 15 metropolitan markets, declined 4.3 percent in June following May's all-time high. It cited high prices, low inventory and increased competition as the leading factors. Nonetheless, noted Redfin, buyer demand was up 27.8 percent over last June.

Nationwide, pending home sales for June climbed 1.5 percent, after three months of decline, according to the National Association of Realtors. NAR chief economist Lawrence Yun attributed the rise to fast-paced competition, as those buyers who have the means are snatching up properties as soon as they become available.

As these indicators reveal, demand for housing has not slowed but is being thwarted by lack of availability and high prices. Unless these trends change soon which seems unlikely low supply and growing consumer concern as to whether, with wages stagnant, they will be able to keep up with rising costs may dampen home sales in the second half of the year.