Grand Rapids, MI -- (SBWIRE) -- 04/10/2013 -- With so much going on in the economy, it can be hard to keep up with everything that is happening in the world today.

Dennis Tubbergen, a financial advisor, author, radio show host and CEO of PLP Advisors, LLC gives a hand.

Whether people enjoy his weekly newsletter at www.moving-markets.com or his blog at www.dennistubbergen.com, Tubbergen is dedicated to sharing his viewpoints and opinions. On April 3, 2013 his blog was titled Fake Real Estate Economy?

"Professor Robert Shiller, co-founder of the Case-Shiller housing index, commented recently that the real estate market is 'totally artificial,'" began Tubbergen.

He quotes below from a March 26, 2013 article in Business Insider.

Housing data released Tuesday was mixed, showing home prices jumped while new home sales dropped, prompting renowned economist Robert Shiller to call the housing recovery positive in the short-term, but not without many headwinds. There might even be a bubble, he said.

"One thing that makes it very hard to forecast home prices right now is that we're living in a totally artificial real estate economy," said Shiller, co-creator of the Standard & Poor's/Case-Shiller Index, a widely followed measure of housing prices.

Shiller pointed to the Federal Reserve, which last week reaffirmed its policies on bond purchases and record-low interest rates. In September, the Fed launched a third round of quantitative easing (QE), in which it has bought $40 billion of mortgage-backed securities per month, primarily in mortgage-backed bonds.

Meanwhile, Fannie Mae and Freddie Mac, the two largest U.S. home funding sources, remain in government conservatorship as Congress looks for ways to raise new tax revenues," Shiller noted.

"All of these things are weighing on the futures of housing," Shiller said on CNBC's "Futures Now," adding the recovery might even be a bubble. "One thing you learn from history is that bubbles can occur at any time."

The Case-Shiller Index on Tuesday soared 8.1 percent compared to a year ago, kicking off the year with the biggest year-over-year increase since 2006. Home prices in the 20 major U.S. cities tracked by the index gained 1 percent in January versus the month prior, topping estimates for a gain of 0.9 percent.

To Shiller, the Phoenix and Las Vegas housing markets have grown incredibly fast, suggesting the recovery might be a little frothy. Both markets joined the housing bubble in 2004, he noted, only to later crash by 50 percent. Today, home prices in both cities are rising "with some exuberance," which troubles Shiller.

Nonetheless, Shiller thinks a full housing recovery is a long way off. He thinks it could take 40 years before home prices rise to pre-2007 levels.

"What might Shiller mean by 'artificial real estate economy'?" asks Tubbergen. "Essentially that the U.S. government has pretty much taken over the mortgage industry. According to a recent article, the U.S. taxpayer now backs about 90 percent of all mortgages, up from about 30 percent in 2006."

Tubbergen quotes below from the December 18, 2012 article in Pro-Publica.

At the height of the 2008 financial crisis, the country heatedly debated whether to nationalize the failing banking system. Both the George W. Bush and Barack Obama administrations rejected that path as excessive government intrusion into the marketplace.

Yet since then, with little planning and paltry public discussion, the government has almost completely taken over the American home mortgage market. Banks and other for-profit financial services companies lend money to homeowners, but without the guarantees and other support the government provides, the housing market would barely be functioning now.

Fannie Mae and Freddie Mac, the taxpayer-controlled housing giants, guaranteed 69 percent of new mortgages in the first nine months of the year, up from about a 27 percent share in 2006, according to Inside Mortgage Finance. Meanwhile, the Federal Housing Authority and the Department of Veteran's Affairs currently back another 21 percent of mortgages, up from just 2.8 percent in 2006. Altogether, 9 of every 10 new mortgages are backed by the U.S. taxpayer, up from 3 in 10 in 2006, when the government share hit a decade-low, according to the publication.

"The bottom line is this," concludes Tubbergen. "Without U.S. government involvement, the real estate market would be almost dead. That's what Professor Shiller means by artificial real estate market."

To read the blog in its entirety go to http://www.dennistubbergen.com and select his April 3, 2013 entry.

Tubbergen’s syndicated radio show can be heard on metro Michigan stations WTKG 1230 AM and WOOD Newsradio1300 AM and 106.9 FM.

About Dennis Tubbergen
Dennis Tubbergen has been in the financial industry for over 25 years and has his corporate offices in Grand Rapids, Michigan. Tubbergen is CEO of PLP Advisors, LLC and has an online blog that can be read at www.dennistubbergen.com. To view Tubbergen’s latest Moving Markets? newsletter, go to www.moving-markets.com.

The opinions expressed herein are those of the writer and not necessarily those of USA Wealth Management, LLC. This update may contain forward-looking statements, including, but not limited to, statements as to future events that involve various risks and uncertainties. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual events or results to differ materially from those that were forecasted. Therefore, no forecast should be construed as a guarantee. Prior to making any investment decision, individuals should consult a professional to determine the risks, costs, benefits and fees associated with a particular investment. Information obtained from third party resources is believed to be reliable but the accuracy cannot be guaranteed.