An excerpt from’s interview with Robert Shiller:

CNBC: We have the twenty-city up double-digits for the fourth straight month. what do you make of that?

RS: Well, obviously, we are in a housing recovery, at least for the short term. I have always been less sanguine about this one, but housing is a market with momentum, and right w the momentum is up.

CNBC: Professor Shiller, it looks like there are some peaking in the rates, but I mean the spike in rates, but you say that of only six cities where the prices were rising faster than a month last, and so is that some diminution of the game?

RS: Well, there are some, yeah, there are some weakening signs and the starts are down, and especially in the single-family realm. i think that there is a chance that there is weakening, and there is a all of the fear about the thing that is a cloud over the housing market right now.

CNBC: You seem reluctantly positive, and you have seen it for a long time. I mean, you almost feel like you want to say, ah, it is not for real.

RS: Well, none of this is for real. The housing market has gotten very speculative and it goes through the big cycles. Take California for example. It is and up and down and up and down and decade by decade and it does not go anywhere, but a roller coaster, and that is the way that the markets have become. So for a long-term buyer, the fact that they are going up now does not mean a lot about where it is going to be when you finally sell.

CNBC: We have seen big disappointments and you have mentioned the starts a and the new home sales also disappointing and the soften ing in the terms of the purchase mortgage applications, do you see those trends continuing through the back half of the year?

RS: I think that there is a risk of a weakening housing market. It is a speculative market, and this has been not by research, but by irrational exuberance and that can suddenly change. It is a story, and evolving story, and nobody who can really predict this for sure. It is risky.

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