Rising Home Prices – Really?

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Like it or not, one of the most pessimistic (some would argue realistic) housing economists of our generation, Robert Shiller, will probably always be associated with the worst housing downturn since the Great Depression.  He was one of the first outspoken people to warn us of an impending ’housing bubble’ as far back as 2003.  At that time, most economists scoffed at his assertions and at his newly created S&P/Case-Shiller home-price index.  He was like that single, stray cloud that blocked your personal sun on the beach on an otherwise beautiful day.  Annoying, but if you waited long enough, it would pass and the sun would return.  One small problem - Shiller’s cloud grew into a full-fledged thunderstorm that very few people saw coming.

His S&P/Case-Shiller home-price index has been quoted far and wide as the definitive read on the housing market.  For months, it hasn’t been a rosy picture, but today that sun returned to the beach.  For the first time in three years, his index showed an increase in nationwide housing prices of .5% for the month of May.

He told Reuters Television, “This is much more important than an up day on the stock market.  It may mean that we may have changed direction.”