Robert Shiller: Homeownership Isn’t the Path to Riches

“The conventional wisdom that Americans can gain wealth through homeownership is simply wrong, says Yale economist Robert Shiller, one of the country’s foremost housing experts.

While housing prices have surged over the past year, “I’ve documented that home prices in real terms didn’t increase from 1890 to 1990,” he tells Forbes. “That was the bubble thinking, but it’s still fresh in our minds.”

As for financial markets, Shiller says he learned from his thesis supervisor, MIT Nobel laureate Franco Modigliani, that the efficient market theory is only half correct.

Modigliani’s work on how inflation distorts markets led Shiller to put all his money in stocks during the early 1980s, when Federal Reserve Chairman Paul Volcker slayed inflation. That turned out to be a wise move.”



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