Homebuilders have added another 2.8 percent in the past two days after the government’s budget deal. The agreement keeps homeownership tax benefits, such as the deductibility of mortgage insurance premiums and limits on capital gains taxes, which may help boost home sales, said Michael Rehaut, a homebuilding analyst with JPMorgan Chase & Co. in New York.

“Not only do we view it as a positive that these favorable provisions remain in place, but additionally, this result continues to support our view that the emerging housing recovery remains a top economic priority for the White House, Congress and the Fed,” Rehaut wrote in a Jan. 2 note.

Not everyone is convinced the worst is over. Robert Shiller, co-creator of the Case-Shiller index, said the outlook for home prices is “highly uncertain” because more people are becoming renters rather than buyers. The number of U.S. occupied residences increased by a net 1.15 million in the 12 months through Sept. 30, with a gain of 1.32 million rentals and a drop of 175,000 owner-occupied homes, according to the Commerce Department.

Lower Interest

“We’ve seen a decline in general interest in home ownership,” Shiller, a professor of economics at Yale University in New Haven, Connecticut, said Dec. 27 on Bloomberg Television. “We’re seeing rentals rise. Our permit data show that new construction has tilted toward multifamily.”

Based on home sales, construction starts and mortgage delinquencies, the housing market is “halfway back to normal,” said Jed Kolko, chief economist of Trulia Inc., a San Francisco- based real estate website operator.

“It’s likely that it will be another three years or so -- maybe the end of 2015 or the start of 2016 -- before we see that market nationally back to normal,” Kolko said in a Dec. 26 interview on Bloomberg Television. “Some local markets, like Houston and the San Francisco Bay area, are actually close to where the normal areas are. Whereas others, like Chicago and Atlanta, are a long, long way from normal.”

Home Prices

Home prices rose 4.3 percent in October from a year earlier, the biggest year-over-year price gain since May 2010, according to the S&P/Case-Shiller index of 20 cities. The gauge is up almost 9 percent since hitting a 10-year low in March. It fell as much as 35 percent from a July 2006 peak.

Competition among buyers seeking to take advantage of low prices and record-low interest rates propelled the price gains, Kolko said. The rate for a 30-year fixed loan tumbled to an all- time low of 3.31 percent in November, according to Freddie Mac. The number of homes listed for sale that month fell to the fewest since December 2001, data from the National Association of Realtors show.