Tags: Robert Shiller | housing | economy | weakness

Yale's Robert Shiller Sees 'Clear Evidence of Weakening' in Housing

By    |   Wednesday, 30 July 2014 08:06 AM

Sluggish home prices and sales signal a sluggish home market in general, says Nobel laureate economist Robert Shiller of Yale University.

The S&P/Case-Shiller index of home prices in 20 metropolitan areas slipped a seasonally-adjusted 0.3 percent in May from April. And the index rose 9.3 percent in the 12 months through May, the slowest pace since February 2013.

"The way these markets go, that [0.3 percent] dip could be a turning point," Shiller told CNBC.

Given recent declines in new and pending home sales, "there's some clear evidence of a weakening," he said.

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The market has enjoyed a "huge boom" since March 2012, with prices up 27 percent during that period, Shiller said.

"The question is what would end that boom? This might be a little downward blip, and it might continue going up. But I think it's not going to go up a lot more — maybe 10 percent — before a correction."

Banks' reluctance to make home loans is hampering potential home buyers, and they may be "rattled" by geopolitical turmoil, Shiller said. "It seems like optimism about housing is weakening,"

Some analysts see the price decline as beneficial for housing and the economy.

"It’s a healthy slowdown for the housing market," Aneta Markowska, chief U.S. economist at Societe Generale, told Bloomberg. "The sooner we correct to a more sustainable growth rate, the better it is for the price outlook in the medium-term."

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Sluggish home prices and sales signal a sluggish home market in general, says Nobel laureate economist Robert Shiller of Yale University.
Robert Shiller, housing, economy, weakness
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2014-06-30
Wednesday, 30 July 2014 08:06 AM
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