Case-Shiller Index co-author Robert Shiller spoke with FOX Business Network’s Dagen McDowell and Connell McShane about the state of the housing market and the United States debt crisis. Shiller discussed the possibility of a U.S. default and therefore a sudden spike in interest rates and said it’s “absolutely a concern” but that “this might be a buying opportunity for houses.” He also said, “oddly though, we don’t see that many people thinking that because confidence is down.” Excerpts from the interview can be found below, courtesy of Fox Business Network.
On if he worries about a sudden spike in interest rates if the United States defaults:
“That’s absolutely a concern, so this sounds funny coming from me, but this might be a buying opportunity for houses. If we’re gonna see a spike in interest rates, home prices are gonna come down a lot, it could be a good time to buy. Oddly though, we don’t see that many people thinking that because confidence is down.”
On market impact if the United States’ credit rating is downgraded:
“Our sense of ourselves as a nation would be damaged, our prestige in the world. I don’t like the sound of that at all and I don’t think it’s gonna happen. It’s a prestige hit and that might discourage people.”
On the possibility of a U.S. default:
“You watch the speeches of Obama and Boehner last night and they were at each other. They both were blaming each other and it didn’t sound right or good at all and this crisis is brought on by that. It would be damaging if it did. A downgrade could happen even if there is no default, so the probability is higher, so I give the downgrade a 0.1 probability and the actual default half that, pretty low.”
On the latest housing numbers:
“Our latest numbers were up in 17 of our 20 cities. The problem is seasonal. It could have been worse. The mood is better than it was a few months ago.”
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