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Yale Economist Robert Shiller on the outlook for housing and a potential default or downgrade’s impact on the U.S. economy.
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And speaking of losing the latest report out on home prices this morning.
And home buyers are helping give prices well a year over year let's take a look at those numbers it is not.
Pretty we're talking about -- on in every city except one.
The DC the only -- showing a year over year gain Minneapolis that -- looking at there was the biggest loser decline of nearly 12% Robert Shiller co author of the S&P case Shiller.
A report and He joins us right now to tell us what about housing any update in terms of how things are progressing.
But I think it looks better than a year over year numbers suggest.
Our latest numbers were up that -- -- may numbers were up in.
Seventeen of our twenty cities.
So that doesn't combat the problem is that it's the seasonal.
Mostly the seasonal the summer months yet should be up a little bit right to this should be up -- yeah but it.
It's certainly could've been worse and I think that the in the mood is better than it was a few months ago but.
Mood is not all of that is it not and if it's so much the equation of affordability is an interest rates.
Do you worry about sudden spike in interest rates if Washington can't get its act together.
That's absolutely a concern.
So this might be it sounds funny coming from me this might be a buying opportunity for houses.
If -- is if spike in interest rates.
Home prices income not a lot.
It could be a good time did I and on oddly though we don't see that many people thinking that.
And I think it's because confidence is down and so.
That's the big thing is what will happen to consumer confidence -- home buyer confidence.
Well even if we had and if we have some room of a bigger debt mess and we're already -- for example go past the August 2 deadline without a deal.
Or the credit of the US the AAA rating its -- -- -- get downgraded either one of those situations certainly wouldn't help confidence you wouldn't think.
And then and then interest rates spike up yet you -- give any sense of what this could look like service to get downgrade -- -- we get it done right what would that look like.
Well to me.
-- -- sense of ourselves as a nation would would be damaged.
Our prestige in the world I really don't like the sound of that that are actually don't think it's gonna happen -- but.
You know confidence is very important factor in people's decisions and if -- just taken a hit like that and it's -- prestige it's a sense of who we are and that might discourage people -- if you don't like the sound of an -- great and you certainly don't like the sound of default.
I mean what's the possibility that happens in your mom and this the thought would be different then.
You know in 1933.
We.
Defaulted on the gold -- under Roosevelt.
The -- that was.
Different this seems to be like you watched the speeches of Obama and Dana last night like they were just.
At each other I mean like river and a political impasse which they both were blaming each other didn't sound right -- good at all and that this crisis has brought on by that.
It's not.
In 1933 because there at the depths of the depression you know it seems as may be okay.
This time it it it's just not looking good to.
Local crisis that could create an economic crisis -- essentially if it goes to this point be a good you've got economists work.
In probabilities right to try to assign a probability to certain outcomes you know so with the probability of downgrade is what in your mind in the probability of what -- brought -- defaults is one.
Right I don't have numbers now I can -- I thought this is that adopt from my computer timeline that the probability of -- downgrade could happen even if there is notified right that's higher I give the downgrade point one probability.
The -- the actual default have that.
-- still very low problem I'm just.
I I think these people -- at the day at their hearts they don't wanna see it happen and it won't.
That does it yeah -- want you say it long.
You just said it won't can I -- I hope it doesn't but.
Or why would Hannah.
It would be damaging if it did and that's why I think they like it almost unfathomable to you.
That they well let it happen we have never me and the defaulted I knew -- I mentioned legal clause.
That was that was little different.
Never had a squabbling like this lead to -- the flaws like we can't get their act the other.
Hoping for that last minute and that's what's gonna take at this point -- -- that deadline but we'll talk to against it's always good to have you on Bob.
So thoughtful and always -- take very yourself.
