Housing Has Better Momentum Than Stocks

Economist Robert Shiller, a Yale University professor, told CNBC on Tuesday that even though the housing market is showing some signs of slowing, the recovery still remains strong.

“There is a certain, substantial amount of momentum in the housing market — much more so than the stock market,” he says. “I think this boom we saw in the last year and a half in home prices has something to do with quantitative easing and the record-low mortgage rates.”

But there are signs of easing: Mortgage rates have been rising, while building permits and housing starts are softening. Still, Shiller says he doesn’t see those factors as derailing the housing recovery. In fact, Shiller, who co-founded the Case-Shiller Home Price Index, says the futures market is predicting 25 percent higher home prices in 2018. “That seems like a possibility,” he told CNBC.

Source: “More Momentum in Housing Than Stocks, Shiller Says,” CNBC (April 15, 2014)