Robert Shiller Tells Fox Business Home Prices Could Fall For 20 Years

Case-Shiller Index co-author Robert Shiller spoke with FOX Business Network's (FBN) Connell McShane about data out today showing that United States home prices have fallen for the eighth straight month, down 3.6% in March. Shiller said the data suggests “housing prices will fall further” but this does not indicate “a bad future for this country.” He went on to say he is “optimistic” that home prices will suffer a 20 year drop because it would require the “housing constructions industry gets ever more efficient.“ Excerpts from the interview are below, courtesy of Fox Business Network. On whether home prices could fall for 20 years in the United States as they did in Japan: “They have done it before. Yes I am optimistic they might do that. It's a good thing for America if the housing constructions industry gets ever more efficient. They have been doing that. They have produced more and better houses. That's what we want. That's the American dream. Affordable housing for everyone. If our incomes don't fall, that means we could buy more housing. It's not a bad future for this country.” On whether the “American Dream” of owning a home still exists: “We probably be a nation of homeowners for a long time but I think its pulling back. People are less included to think of a home as an investment. This is a country of homeowners but I think renting will back somewhat. There is a problem. If people want more to rent, then the existing housing stock is not well suited as rental. There is scattered properties. I think it suggests housing prices will fall further.” On whether housing prices will continue to fall: “There is a risk they will continue to fall, which is bad for someone who is holding housing as an investment but good for the next generation that housing will be affordable. People are worried they might keep going down. After a bubble it takes a long time for people to get their enthusiasm back.”