Amid slowing sales and rising rates, Nobel Prize-winning Yale economist Robert Shiller has said that he does not expect “a sharp turn in the housing market at this point.”
In a conversation on CNBC’s “Power Lunch”, Shiller said that while prices have been rising since 2012, a situation which might be called a “bubble”, this recent rate of growth is not as sharp as the growth rate before the downturn. “It's not the same,” he says. “It's more placid.”
Rates started climbing in September and are now approximately a full percentage point higher than they were a year ago. The 30-year fixed mortgage rate is now around 5 percent.
On Wednesday, the U.S. Census reported that sales of newly built homes dropped 5.5 percent in September compared with August and were 13 percent lower compared with a year ago. The slowdown is worse than had been predicted, even with higher rates factored in.