Tags: Yale | Shiller | Housing | Turning

Yale’s Shiller: It's Too Early to Say Housing Market at Turning Point

Monday, 26 March 2012 02:19 PM

Despite clear signs that housing is finally bottoming out, it's too early to make the call if the sector has hit bottom and ready to turn the corner to better days ahead, says Robert Shiller, Yale economist and co-founder of the Case/Shiller Housing Index.

"What we did notice for the last four months is that prices have been falling, at the same time indicators are looking stronger — permits are up, the NAHB housing market index is up and in the economy, the confidence is up," Shiller tells CNBC, referring to the National Association of Homebuilders/Wells Fargo Housing Market Index, which rose in January and in February and came in flat in March.

"There are signs that it could be a turnaround. I give it a chance that this could be a turning point but I'm not saying it is — I think it's still too uncertain to call a turning point and it could continue to go down."

Editor's Note: Google Banned This Video But You Can Watch it Here

The National Association of Home Builders says despite a leveling off in March, its index rose for a fourth consecutive month in January and a fifth consecutive month in February and may be showing signs of a rebound.

"While builders are still very cautious at this time, there is a sense that many local housing markets have started to move in the right direction and that prospects for future sales are improving," NAHB chairman Barry Rutenberg says in a statement.

Other NAHB experts agree, but do stress a need for caution.

"Builder confidence is now twice as strong as it was six months ago," says NAHB Chief Economist David Crowe.

"That said, many of our members continue to cite obstacles on the road to recovery, including persistently tight builder and buyer credit and the ongoing inventory of distressed properties in some markets."

More recently, some housing figures came in a little weaker than hoped.

The Commerce Department reports that new single-family home sales fell 1.6 percent to a seasonally adjusted 313,000 units in February.

The National Association of Realtors, meanwhile, reports that total existing-home sales slipped 0.9 percent to a seasonally adjusted annual rate of 4.59 million units in February.

While both figures may have missed some expectations, they still represent improvements from a year ago.

Yet they haven't climbed high enough to indicate the sector is clearly on the path to recovery, and other experts agree that the sector's fate still remains unclear for now.

"We're continuing to get mixed messages out of the housing market," says Rob Morgan, chief investment strategist at Fulcrum Securities in Philadelphia, according to Reuters.

"Even though these numbers are in line, they're well short of what a healthy market would be."

Editor's Note: Google Banned This Video But You Can Watch it Here

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