Outlook For Housing Industry Appears Promising

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The latest reports show that both new and existing home sales are up. What's spurring the improvement, and can it last? Not all economists, however, are optimistic.

STEVE INSKEEP, HOST:

A lot of housing news is out this week and all of it is looking surprisingly good. Sales of new and older homes both saw gains. And two reports showed prices rising.

NPR's Chris Arnold has more.

CHRIS ARNOLD, BYLINE: The question is: Can this last? And some people who've studied housing for decades think that maybe it can.

William Weaton is an economist at MIT.

WILLIAM WEATON: I think we've reached the bottom, the sales rate has bounced up and I'm quite optimistic that we're beginning - will have to be fairly gradual, but nevertheless, distinct recovery.

ARNOLD: And as far where home prices go next...

WEATON: I think prices will not fall further, there's investors who are buying up houses in many markets...

ARNOLD: Wheaton says another good sign is that more people are starting to form their own households again - that is getting married or moving out of their parents house or their roommate's apartment. Still, other housing economists remain worried, such as Robert Shiller at Yale.

ROBERT SHILLER: I think there are still risks, though, going forward. We've been in a downtrend now for over five years. There's a lot of downward momentum.

ARNOLD: Shiller says that millions of home-owners are underwater and foreclosures may pick up again, so he thinks that prices could fall further.

Chris Arnold, NPR News.

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