Housing Recovery is “Precarious,” Says Economist Gary Shilling

When the housing market cratered in 2007-2008, pulling the banking sector down with it, the U.S. economy fell into recession. Five years later the recession is over and housing has recovered.

Consider these markers:

• Homebuilder confidence breached the key 50-level mark in June—for the first time in seven years—indicating that builders have turned optimistic about the market.
• New home sales are up 29% from a year ago, and existing home sales – for April—hit a three-year high.
• Home prices continue to climb. The benchmark S&P/Case-Shiller home price index posted its biggest gains in seven years, and compared to a year ago, the the median sales price for new homes are up 15%; and for existing homes up 11%, at $271,600 and $192,800, respectively.

Even the Fed is becoming more optimistic about housing. Its latest monetary statement, issued Wednesday, says housing has “ “strengthened further.” (more)

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