UK house prices dipped 0.4 per cent in April, the second consecutive monthly fall recorded in the Nationwide house price index - but the building society is still predicting prices will rise by two per cent over the year.
Meanwhile, the annual rate of growth slowed to 2.6 per cent, the weakest it's been since June 2013.
"In some respects, the softening in house price growth is surprising because the unemployment rate is near to a 40-year low, confidence is still relatively high and mortgage rates have fallen to new all-time lows in recent months," said Nationwide's chief economist Robert Gardner.
"While monthly figures can be volatile, the recent softening in price growth may be a further indication that households are starting to react to the emerging squeeze on real incomes or to affordability pressures in key parts of the country."
However, he said it would be unwise to write off the UK consumer, noting although retail sales have slowed, spending in other areas, including on big ticket items like cars, has remained robust.
And though house price growth has softened, Gardner added: "Activity has remained broadly stable, with mortgage approvals for house purchase fairly steady at a respectable 68,000 per month, a little above the average prevailing in recent years.
"While wage growth has stagnated in real terms (i.e. after taking account of inflation), the number of people in work is close to all-time highs. Indeed, despite the pressure on household income, consumer confidence remains fairly high by historic standards."
As such, he said it was too early to know whether the slowdown in house price growth is merely a blip, a reflection of the impact of the squeeze on household budgets, or due to mounting affordability pressures in key areas of the country.
And given ongoing uncertainty over the UK's economic future due to Brexit, as well as the upcoming General Election, it is even more difficult to predict housing market trends.
“Nevertheless, in our view, household spending is likely to slow in the quarters ahead (along with the wider economy) as rising inflation increases the squeeze on household budgets," said Gardner.
"This, together with mounting housing affordability pressures, is likely to exert a drag on activity and house price growth in the quarters ahead.
“However, the subdued level of building activity and the shortage of properties on the market are likely to provide support for prices. As a result, we continue to believe that a small increase in house prices of around two per cent is likely over the course of 2017 as a whole.”