Tags: Shiller | housing | mortgage | rates

Shiller: 'I'm Getting More Optimistic' on Housing for Short Term

By    |   Wednesday, 26 June 2013 08:04 AM

Another strong increase in housing prices is making Yale economist Robert Shiller a believer in the market's short-term strength.

The S&P/Case Shiller home price index – named partly after him -- soared 12.1 percent in April from a year earlier, the biggest increase since March 2006.

"I am getting more optimistic," Shiller tells CNBC. "These were strong numbers. I think that for the next year, it is probably a safe bet they will keep going up."

Editor's Note:
The ‘Unthinkable’ Could Happen — Wall Street Journal. Prepare for Meltdown

A lot of people are flipping homes again now, he says. "I can't tell them that they are wrong. I just don't know about the longer term, but for the short run, it is looking solid."

While mortgage rates have rebounded from their record lows, they remain low on a historical basis, Shiller notes.

"And people are still juiced by that, because they think they might go higher," he adds. "They still want to buy because of the mortgage rates."

Homes remain affordable, because interest rates and home prices are both historically low, despite their recent increases. "Affordability is still great," he asserts.

"Home prices, while they are up over the last 14 months, are still low, and mortgage rates are still low. So this is still a good time to buy."

But, he adds, "People should always remember that prices go both ways — up and down. And they could go down."

Other experts are enthusiastic about housing too.

"Housing's doing really well, and I don't think the backup in mortgage rates to date is going to derail it," Brian Jones, senior U.S. economist at Societe Generale, tells Bloomberg. "We're still well off the highs, but price increases could continue for the next several years."

Editor's Note: The ‘Unthinkable’ Could Happen — Wall Street Journal. Prepare for Meltdown

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Another strong increase in housing prices is making Yale economist Robert Shiller a believer in the market's short-term strength.
Shiller,housing,mortgage,rates
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2013-04-26
Wednesday, 26 June 2013 08:04 AM
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