A U.S. housing-market revival may prove illusory and the threat of further weakness remains, said Robert Shiller, a professor at Yale University and co-creator of the S&P/Case-Shiller index of property values.
“The housing market has been declining for something like six years now, it could go on, that’s my worry,” Shiller told Tom Keene in a Bloomberg Television interview Thursday in Davos, Switzerland. “The short-term indicators are up now, it definitely looks better, but we saw that in 2009.”
The property market has shown signs of recovery and homebuilding has rebounded as low borrowing costs spur buyer demand, bolster prices. Values rose 7.4 percent in November from a year earlier, the ninth straight increase and the biggest gain since May 2006, Irvine, California-based data provider CoreLogic said last week.
“It’s a good housing market in the sense that mortgage rates are very low and prices have come down to normal levels, so yes, it’s a good time to buy if nothing bad happens,” Shiller said.
“But it’s also a very bad housing market in that most of the mortgages are being supported by the government, and we have the Fed and this buying program. It’s a very abnormal market. There’s a lot of uncertainty going forward.”