Consumer confidence in housing has been on the rise all year, thanks to increasing home values and a strengthening job market. That confidence, however, may be taking a hard hit from swings in the U.S. stock market, volatility in overseas economies and uncertainty over interest rates.
"Between Greek default, war, plummeting oil prices and most recently fears of a Chinese slowdown, it's been a volatile summer. Like swimming with a bully in the pool, it seems like every time the market comes up for air, something comes along and pushes it right back down again," said Zillow's chief economist, Svenja Gudell.
Higher home prices are taking their toll on potential buyers. Consumer demand for housing fell for the fourth straight month, according to Redfin, a real estate brokerage. Its monthly demand index dropped 5 percent in July from June, but is still 9 percent higher than one year ago.