hurting. >> robert shiller, you're so associated with the case shiller report every month, and you're on tv talking about home prices, and it's so interesting, you often say to me and others that middle class americans need to top looking at houses as a balance sheet item as much as they do. and one of the things in ed's research is that wealthier americans, for wealthier americans, the home is a smaller part of the balance sheet than it is for middle class americans, and they get hit more as well as gain more from housing ups and downs. >> i think there's a common view among middle class americans that housing is the best investment. and a lot of people think that. it is, in a sense, because it's the investment that they most often have, and any investment is important. you have to plan for your future. but it hasn't historically performed as well. but right now, people are fairly optimistic. i just and a survey with case and thompson. the average american in the four cities we studied expects a 5 and a half percent growth in home prices for the next ten years, and that's pretty good

we'll speak with robert shiller about what he thinks 2015 will bring to housing. >> you can see futures are off premarket. crude continuing to fall. it all began with that sell-off midday yesterday. albeit on light volume. unbelievable what's happened to crude. you thought some of the worst was over. it clearly isn't. russia's gdp down in november for the first time in five years. it's beginning to have more and more spillover effects. >> the ruble is up today. that's something positive. >> almost down 8% yesterday. >> down 44% for the year of 2014. it's been a brutal year for russia. the u.s. is where it's at and continues to be. 53rd record close? heading for a third year of gains for the s&p 500. double digit percentage gains. something we haven't seen since the '90s. today we'll get consumer confidence. light volume trading days toward the end of the year. the move is higher as oil feels like the move is lower. >> narrowest trading range for the dow the entire month yesterday. saw you had these narrow ranges. intraday records for the s&p, the russell, utilities. >> that's what compa

robert shiller is yale university professor of economics & ndd he is joining u. professor, thank you for being here today. >> my pleasure, becky. >> i'm of two minds on this. it sounds like a great idea to get more consumers in to homes. isn't this what got us in to trouble to begin with, 3% down payments? >> it is not completely new now. we have fha mortgages doing almost the same. yes, it is. it sounds risky, right, to the lender and for the mortgage insurer who will insure these. it is only a 3% margin. if someone defaults and they have to sell the house they mat. the good side is usually people don't default for a year or two at least. >> he good news is we won't have another crash for a year or two. >> that's a question. home prices -- our latest numbers are going up at 5% a year. if that keeps up, 3% margin will turn to an 8% margin for lenders in one year. >> although we have seen years where home prices may decline by 10%. >> that's what worries me. we are seeing a deceleration. they are going up but at a lower pace. in history that's been the precursor t

this morning on squawk on the street robert shiller said home sales numbers are troubling him a bit. he said he considers the housing market to be, quote, fragile. >> thank you very much. >>> cnbc's popular million dollar home competition is back. this time with a twist. this time we are blowing the roof off of the $1 million price range and will show you the most expensive houses we could get into. these mega mansions are battling to see which is the best bang for your buck. last round's winner was the southern belle. she takes on a new challenger now, the party pad. go to cnbc.com/vote and cast your vote for your favorite home. the winner you select moves on to the next round and the loser is eliminated. here is the next million dollar matchup. >> this elegant five acre estate offers true southern hospitality. make a grand entrance up the three story stareicose and mosey across 22,000 square feet adorned in details. boasting six bedrooms eight baths, library, gourmet kitchen and wine cellar. the custom built fire places look like the ones in the white house. my word. outside verand

that is what i would like to talk to robert shiller about. >> millenials who are renting versus buying. you hear quite a bit about that. >> if there is a problem. it is not exactly that the housing recovery is running out of steam -- every recovery has to run out of gas or fuel whatever. if it does we will see when the case schiller index comes out, but right now 60% below its peak. >> construction was 8% of the economy, then went down to 4%, does it ever get back to 8%, or do something take its place?> i am looking at afghanistan. the nato mission in afghanistan inended. we are to handling it or looking at it as a security challenge. the world bank came out with numbers looking at afghanistan as an economy, independent of the very grave and serious security challenges they have. there has actually been some social progress in the last 10 years. i think of it as a wash, but look at this -- school enrollment in 2001 was one million, now 9.2 million in 2013. increased access to water. if you look at gdp growth, 9.4%. a lot of countries would be desperate for that. that is an isolated are

housing expert robert shiller is our guest. "squawk box" will be right back. will that be all, sir?nk you. ordering chinese food is a very predictable experience. i order b14. i get b14. no surprises. buying business internet, on the other hand, can be a roller coaster white knuckle thrill ride. you're promised one speed. but do you consistently get it? you do with comcast business. and often even more. it's reliable. just like kung pao fish. thank you, ping. reliably fast internet starts at $89.95 a month. comcast business. built for business. >>> fuel costs falling. home prices rising. is there weakness ahead? robert shiller joins us. >>> how health care is helping cleveland's comeback. >>> a nor'easter is hitting the east coast, but the sun shining bright for consumers. a new survey data shows optimism is now at a post-recession high. the second hour of "squawk box" begins right now. ♪ >>> welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin. asian markets are falling sharply. 5% in shanghai overnight

robert shiller believe home prices will be flat to slightly higher.id glitzer believes there is a possibility home prices nationally could fall on an annual basis next year. this isn't necessarily a bad thing because remember, price appreciation is keeping a lot of people sidelined. it's not because of lack of demand but because of tight supply that will keep those prices inflated. they say the home builders need to step up. where do they need to build? no more in the suburbs and exburbs. one interesting point they made is multifamily housing, despite how much new supply we've seen come on the market, is not overheated. they believe there will continue to be rental demand and it will be strong in 2015. not because of home prices but simple home buyer economics. >> that goes back to the stagnation in incomes. that's the core problem that we face as a country. you can't underwrite your way out of a stagnating income issue. >> it was interesting to hear they do not believe credit is the problem standing in the way of so many young home buyers. most did n

you interviewed robert shiller, the nobel prize winner the other day about this topic. >> in 2015 if wanted to own stocks which i know you said are expensive for a while or a house which is the better investment? >> i don't think of housing as a very good investment unless you have a plan unless you are a smart real estate manager. so i would still go with the stock market. >> interesting. the housing expert himself saying stock market is probably a better value than housing, but we want to get another take on this. joining us now samantha, the first woman to be featured on bravo's million dollar listing. we appreciate you spending your new year's eve with us. >> thank you for having me. >> do you agree, stocks over housing? >> you know i heard that but i also heard that it's also good if you have a plan and i think that's the main point. in real estate you have to have a plan. i bought my house for $550,000 now homes in my neighborhood are selling for $750,000. that's something you can't find in the stock market. i mean unless correct me if i'm wrong, on that. >> unless you're in te

i don't know what robert shiller may have to say but i spent a lot of time in london and i find somewhat more respitivity to expression in the uk than i do in this country. so i think this is changeable. >> with that i'm going to dismiss the panel. and invite david kamin up. david kamin is assistant professor of law at -- oh, sorry. [ applause ] david kamin is assistant professor of law at nyu. veteran of the obama administration, both the office of management and budget and the national economic council. and we asked him to think about if you know that you're uncertain, how can you, instead of ignoring that, take chuck manski's advice and don't ignore it, how can you build in to government policy, in to legislation, ways to anticipate and adjust to it. after david speaks i'll be joined by bill hoagland, gene sperling, and representative cooper who will not say that they are experts on what washington does. >> first thanks to the hutchins center for organizing this conference. and i very much look forward to the discussion with representative cooper, bill, and gene, and want to thank the