morning’s S&P Case-Shiller Home Price Index came in about where
most housing “realists” thought it might and that group
apparently includes one of its creators, Yale economist Robert Shiller, who
had a few comments about the latest data.
The housing slump
Tax credits and
historically low mortgage rates have failed to lift home prices so far this
year. Prices fell 0.5 percent in March from February, according to the
Standard & Poor’s/Case-Shiller 20-city index released Tuesday.
That marks six
straight months of declines — a sign that the housing market is going
“It looks a
little like a double-dip already,” economist Robert
Shiller said in an interview. “There is a very real possibility of
some more decline.”
The co-creator of
the Case-Shiller index, who predicted in 2005 that the housing bubble would
burst, says he worries that home prices rose last year only because of the
federal tax credits. That fear is shared by other economists. They note
that weak job growth, tight credit and millions more foreclosures ahead will
weigh on the home market.
extension of the homebuyer tax credit and/or some stunning job growth in the
months ahead, it’s hard to imagine how home prices can go anywhere but
down. The big question remains, “How much?”
Tim Iacono is
the founder of Iacono Research which provides market commentary and
investment advisory services specializing in macroeconomic analysis and
commodity based investing. He also writes the popular blog The
Mess That Greenspan Made.