STAT OF THE WEEK: Getting to the Bottom of Things (in the Housing Market)?

14 Mar

According to last month’s NAHB/Wells Fargo Housing Market Index, home-builder confidence in the new single-family residential market increased for the fifth consecutive month (from 25 to 29). This marks the highest level the index has reached in more than four years.

The report had even cold-hard realists like Robert Shiller, the economist who predicted the housing bubble in the second edition of his book Irrational Exuberance, singing an optimistic tune. Well, mostly…

“We’re seeing some good news now. Starts, permits, confidence, the NAHB housing index is strikingly up.  It’s still low, but it’s up,” he said on CNBC last week. “Well, in terms of housing, we might be at the end game. Home prices are back to a normal level… Housing is very affordable, interest rates are down, prices are down to kind of a normal level. They haven’t overshot normal. So maybe in terms of housing, this it it. This is it.”

Then when pressed to declare that the housing market has reached bottom, Shiller gave the following equivocation point rather than the exclamation point that all TV anchors and producers desire.

“It might be, yeah. Things can turn quickly and sharply. It’s too soon to tell.”

Will homeowners and housing pros soon be able to laugh again?


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