Yale economics professor Robert Shiller was on Yahoo's Daily Ticker with Aaron Task today talking about that today's Case-Shiller home price index, which unexpectedly climbed 0.5 percent year-over-year in June.
Shiller famously predicted the last housing bubble and he is also the co-creator of the Case-Shiller index. So, with each new data point, everyone wants to know if Shiller thinks housing is heading up.
"Well it might be," he said. "We seem to have upward momentum and we have confirmatory evidence and like NAHB housing confidence index.
"But you know we have lots of clouds on the horizon too."
The dreaded "but."
Some of the clouds he pointed to were the problems at Fannie Mae and Freddie Mac, which is propping up the housing market and supported by the government. He also made reference to the key macro issues like the eurozone crisis, the slowdown in Asia, and the oncoming fiscal cliff in the U.S.
Then again, the housing market could be like the stock market in early 2009 said Shiller.
Months and years later prices could be way up. "That might happen again."
"Unfortunately it's not quite obvious," he said. "History surprises you. We don't know for sure."
Watch the whole interview here:
ROBERT SHILLER: Housing May Have Bottomed, But... - Business Insider
LINK: http://www.businessinsider.com/robert-shiller-housing-may-have-bottomed-2012-8?nr_email_referer=1&utm_source=Triggermail&utm_medium=email&utm_term=Money%20Game%20Chart%20Of%20The%20Day&utm_campaign=Moneygame_COTD_082812
There is more good news for the U.S. housing market. Home prices continued on their upward trajectory in June, according to the latest S&P Case-Shiller Home Price Index, beating analysts' expectations by a small margin.
The price of a single-family home was up 0.9 percent from May on a seasonally adjusted basis and up 0.5 percent from June of last year. It is the first year-over-year gain since 2010 and if you exclude the first-time homebuyer tax credit it is the first year-over-year increase since 2006.
So is now the time to buy (before prices creep higher)?
"We seem to have upward momentum...but there are a lot of clouds on the horizon too," says Robert Shiller, economics professor at Yale and co-creator of the widely-followed index.
Shiller says there is really no way to know if home prices will continue to rise in the near future.
The "storm clouds" affecting prices include:
- The European debt crisis
- Weakening economies in Asia
- The so-called Fiscal Cliff
- Government support of the U.S. housing market
Glenn Hubbard, one of Mitt Romney's economic advisors, has proposed mass refinancing for struggling homeowners, a plan that Shiller supports.
"I think it is a good idea," says Shiller. "I think a lot of people are having trouble refinancing. It almost seems like an injustice."
Even if the recent housing data shows a burgeoning recovery in the market, there's no need to rush into buying, Shiller argues.
"Housing market events take place over years," he says. "The market usually doesn't turn on a dime...you probably have years of time to get into this market."
