‘The housing market has been declining for something like six years now, it could go on, that's my worry,’ said Shiller, a Yale University professor and co-creator of the S&P/Case-Shiller index of property values. ‘The short-term indicators are up now – it definitely looks better, but we saw that in 2009.’
In a Bloomberg Television interview conducted at the World Economic Forum in Davos, Switzerland, Shiller warned that pronouncements of a recovery-bound housing market are premature.
‘It's a good housing market in the sense that mortgage rates are very low and prices have come down to normal levels – so yes, it's a good time to buy if nothing bad happens,’ Shiller said. ‘But it's also a very bad housing market in that most of the mortgages are being supported by the government, and we have the Fed and this buying program. It's a very abnormal market. There's a lot of uncertainty going forward.’
Shiller added that the U.S. economy, on the whole, is nowhere near long-term stability.
‘We've been five years in a slow economy, and it could go quite a bit longer,’ he said. ‘We've seen gross domestic product growth at sub-normal levels.’