Robert Shiller Says US Housing Market Might Face Another Bubble

Don’t forget the next wave of mortgage failures.

(H/T myinvestingnotebook For Finding This)

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Introduction (Via NBC Chicago)

The housing market, which already has been battered by the worst collapse since the Great Depression, could be setting itself for another bubble, well-known economist Robert Shiller told CNBC.

Although the most recent Case-Shiller report showed that US home prices posted their first monthly increase in almost three years, the sector—and the economy—are still a long way from recovery, Shiller said.

Excerpts (Via NBC Chicago)

“It’s clearly not over yet,” he said. “It’s not obvious that people are really ready to spend again. That may take years to rekindle that normalcy.”

With the exception of a government-injected stimulus, the Great Depression draws a strong corollary to today’s market, and Shiller fears it will struggle through a similarly slow recovery, he said. Though the stock market doubled in 1933 and rallied for about four years, unemployment numbers continued to sag and the economy didn’t return to prosperity.

“That’s what I worry could happen,” Shiller said. “We’ll have a recovery and it will be exceptionally weak for years to come.”

Click Here To Learn About Why The US Housing Market Might Face Another Bubble