There is more good news for the U.S. housing market. Home prices continued on their upward trajectory in June, according to the latest S&P Case-Shiller Home Price Index, beating analysts' expectations by a small margin.
The price of a single-family home was up 0.9 percent from May on a seasonally adjusted basis and up 0.5 percent from June of last year. It is the first year-over-year gain since 2010 and if you exclude the first-time homebuyer tax credit it is the first year-over-year increase since 2006.
So is now the time to buy (before prices creep higher)?
"We seem to have upward momentum...but there are a lot of clouds on the horizon too," says Robert Shiller, economics professor at Yale and co-creator of the widely-followed index. Shiller says there is really no way to know if home prices will continue to rise in the near future.
The "storm clouds" affecting prices include:
- The European debt crisis
- Weakening economies in Asia
- The so-called Fiscal Cliff
- Government support of the U.S. housing market
Shiller says neither President Obama nor Mitt Romney have proposed a viable solution for fixing the housing market and the issue "does not seem to be front and center" in the election. Glenn Hubbard, one of Mitt Romney's economic advisors, has proposed mass refinancing for struggling homeowners, a plan that Shiller supports.
"I think it is a good idea," says Shiller. "I think a lot of people are having trouble refinancing. It almost seems like an injustice."
Even if the recent housing data shows a burgeoning recovery in the market, there's no need to rush into buying, Shiller argues.
"Housing market events take place over years," he says. "The market usually doesn't turn on a dime...you probably have years of time to get into this market."