If expectations have been realistic and lending practices only marginally important, a slowdown in house-price appreciation could be gradual and the consequences for consumption growth could be modest; indeed, as signs of a slowdown are still quite tentative, continued strength in house prices are an upside risk to any easing of demand going forward.
But if disappointed expectations or considerably tighter credit foster more severe or more abrupt price adjustments in enough local housing markets, psychology could amplify the effects of diminished wealth to restrain consumer spending.