Shiller on Housing

New data released this week did little to clear up the outlook for the housing market.

Purchases of existing homes fell 2.7% in August, bringing a four-month streak of rising sales to a halt, according to data released Thursday by the National Association of Realtors. Meanwhile, the market for new home sales improved slightly in August, the Commerce Department reported Friday, but the jump missed economists’ expectations.

Corporate earnings aren’t offering obvious signposts either. That boost in new homes sales helped home builder KB Home (KBH) post a narrower-than-expected third-quarter loss. However, the company warned that recovery for the housing sector would take some time. And on Monday, home builder Lennar (LEN) posted disappointing results but said it could return to profitability next year.

Traders are also trying to handicap the effect of the Nov. 30 expiration of the first-time home buyer tax credit.

With data this murky and near-term demand for homes still uncertain, the jury may be out on the housing sector until next year. But those looking for more data points can expect another key number on Tuesday, when the July reading of the Case-Shiller home price index is due. Although we don’t know yet what that figure will tell us, we did manage to ask Robert Shiller, the Yale economist who co-founded the index. Shiller sat down with us after speaking at a conference in New York sponsored by the Family Firm Institute to discuss what he thought of the real estate market and prospects for a recovery. Watch our exclusive interview below.