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Affordable homes still exist, says Shiller

Posted on Wednesday, October 30, 2013 at 2:54:50 PM

Home prices are closely watched by everyone interested in residential financing. While recent reports indicate a rise in this area, Robert Shiller, co-founder of the Case-Shiller index, believes that prices are still affordable.

"I define a bubble as a time when people have extravagant expectations, and the expectations are driving home price increases," Shiller, a professor of economics at Yale University, told CNBC in a recent interview. "We don't have the mindset of earlier this century."

Residential financing rates are also a driving force behind home sales, and some experts feel that as prices rise that forces buyers out of the market.

However, Shiller explained to the news source that affordability is still good, especially while mortgage rates are not that high. He added that housing conditions are similar to 25 to 50 years ago.

In addition, real estate data firm CoreLogic recently released new home price information. Overall, prices jumped up 10.1 percent over the second quarter, according to the findings.

Also, prices are 16 percent higher than they were during the fourth quarter of 2011, CoreLogic reported. They hit their peak in 2006, when prices were 24 percent above today's figures.