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Professors Karl Case and Robert Shiller, founders of the Standard & Poor’s/Case-Shiller Index appeared on Bloomberg TV (click the image to see the video) to discuss the results of the most recent index, which showed a 3.3 percent decline in housing prices in February. Case said the U.S. housing market has already experienced a so-called “double-dip,” as housing prices plummeted from their 2006 highs, then rebounded briefly due to the homebuyer’s tax credit, and now the market has returned to previous lows. Case cited an “incredible decline” in households — “we’re not building any new houses, and yet vacancy rates are still going up,” he said — as a major area for concern. Meanwhile, Shiller said the 8.8 percent unemployment rate and the difficulties associated with getting financing are plaguing the market. Comments

Most U.S. housing analysts now expect the market to hit bottom some time in 2012, marking yet another delay in the predicted rebound in nationwide home prices. According to the Wall Street Journal, a new survey by Robert Shiller’s MacroMarkets polled 111 economists and analysts, of whom just one one-third now believe home prices will rebound this year. When the company conducted the same survey last June, respondents predicted a 1.3 percent increase in home prices in 2011. Now, those respondents see that increase happening in 2012. [more]

Innovation is lacking in current government-led efforts to fix the ailing housing market, Yale economist and home price index guru Robert Shiller argued in a recent interview with Smart Money. Comparing today’s housing market to that of the end of the Great Depression, Shiller said that while the Roosevelt administration created a number of new institutions that have since stuck (a national convention of long-term mortgages, for one), the Obama administration is “not really developing new things for the longer-run.” He noted that this is especially problematic, given that the ideas that came into being after World War II — like the 30-year mortgage and Fannie Mae — are no longer working in the contemporary economic environment. “One of my proposals is that we go to a mortgage that is more flexible. I call it a continuous workout mortgage that would protect people against unemployment or declines in home prices,” Shiller said. [SmartMoney]

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Policy makers need to be more “inspirational” when designing solutions to the housing market crisis, according to Yale economist Robert Shiller, after whom the S&P’s Case-Shiller Home Price Index is named and which released its second quarter findings today. Shiller noted that it did not make sense to extend the homebuyer tax credit, and that the responses by the Bush and Obama administrations have amounted to “patches and bailouts,” he told the Wall Street Journal. Shiller believes that the solution lies in more “forward thinking” measures. One suggestion he offered was that mortgages should be indexed to inflation to allow for greater long-term certainty for borrowers. Another idea was that mortgage contracts in the future should include some kind of “preplanned workout,” detailing how a loan modification would proceed if the borrower fell behind on payments. Though the Obama administration has launched a debate on how to overhaul Fannie Mae and Freddie Mac, it’s not clear how much that debate will focus on ideas like those suggested by Shiller. [WSJ]

[more]

Policy makers need to be more “inspirational” when designing solutions to the housing market crisis, according to Yale economist Robert Shiller, after whom the S&P’s Case-Shiller Home Price Index is named and which released its second quarter findings today. Shiller noted that it did not make sense to extend the homebuyer tax credit, and that the responses by the Bush and Obama administrations have amounted to “patches and bailouts,” he told the Wall Street Journal. Shiller believes that the solution lies in more “forward thinking” measures. One suggestion he offered was that mortgages should be indexed to inflation to allow for greater long-term certainty for borrowers. Another idea was that mortgage contracts in the future should include some kind of “preplanned workout,” detailing how a loan modification would proceed if the borrower fell behind on payments. Though the Obama administration has launched a debate on how to overhaul Fannie Mae and Freddie Mac, it’s not clear how much that debate will focus on ideas like those suggested by Shiller. [WSJ]

[more]

Policy makers need to be more “inspirational” when designing solutions to the housing market crisis, according to Yale economist Robert Shiller, after whom the S&P’s Case-Shiller Home Price Index is named and which released its second quarter findings today. Shiller noted that it did not make sense to extend the homebuyer tax credit, and that the responses by the Bush and Obama administrations have amounted to “patches and bailouts,” he told the Wall Street Journal. Shiller believes that the solution lies in more “forward thinking” measures. One suggestion he offered was that mortgages should be indexed to inflation to allow for greater long-term certainty for borrowers. Another idea was that mortgage contracts in the future should include some kind of “preplanned workout,” detailing how a loan modification would proceed if the borrower fell behind on payments. Though the Obama administration has launched a debate on how to overhaul Fannie Mae and Freddie Mac, it’s not clear how much that debate will focus on ideas like those suggested by Shiller. [WSJ]

[more]

Given the current housing crisis, the long-term mortgage may be past its heyday, housing expert Robert Shiller told CNBC. “The 30-year
mortgage is outdated, the standard fixed-rate mortgage is outdated,
and it has to be improved,” said Shiller, co-creator of the S&P/Case-Shiller Home Price Index, which tracks home prices in the United
States. “People want a more modern vehicle, and that’s something we
need to think about next,” he added. Now that the finance reform bill
is almost complete, Congress may next be looking to revamp the housing market. [CNBC]

[more]

Given the current housing crisis, the long-term mortgage may be past its heyday, housing expert Robert Shiller told CNBC. “The 30-year
mortgage is outdated, the standard fixed-rate mortgage is outdated,
and it has to be improved,” said Shiller, co-creator of the S&P/Case-Shiller Home Price Index, which tracks home prices in the United
States. “People want a more modern vehicle, and that’s something we
need to think about next,” he added. Now that the finance reform bill
is almost complete, Congress may next be looking to revamp the housing market. [CNBC]

[more]

Fannie Mae and Freddie Mac’s fiscal woes could spell big trouble for taxpayers, who are responsible for the roughly $145 billion in losses the two agencies have incurred on loans they backed, according to CNBC. If housing prices fall further, experts say those losses could grow rapidly — some estimate as high as $1 trillion. Robert Shiller, co-creator of the Case-Shiller Home Price Index, said that the burden on taxpayers has become significant. “Some of use who don’t even own homes are paying to support others and their home ownership,” Shiller said. [CNBC]

[more]

Fannie Mae and Freddie Mac’s fiscal woes could spell big trouble for taxpayers, who are responsible for the roughly $145 billion in losses the two agencies have incurred on loans they backed, according to CNBC. If housing prices fall further, experts say those losses could grow rapidly — some estimate as high as $1 trillion. Robert Shiller, co-creator of the Case-Shiller Home Price Index, said that the burden on taxpayers has become significant. “Some of use who don’t even own homes are paying to support others and their home ownership,” Shiller said. [CNBC]

[more]