A new batch of real estate data gave the media a chance to pull out its recipe for half-baked reporting on the housing market.
On July 25, a housing report released by the National Association of Realtors (NAR) performed better than expected but ABC and NBC’s July 25 evening newscasts spun the story negatively, with NBC even floating talk of a housing “bubble.”
Neither network mentioned that five days earlier Federal Reserve Chairman Ben Bernanke assessed the housing slowdown as “orderly” or that NAR chief economist David Lereah forecasted in January that the housing market would “normalize” from its record-setting 2005 existing home sales mark.
NBC “Nightly News” Brian Williams reported that “sales were down 1.3 percent last month,” while home “prices crept up at the slowest pace in more than a decade” before turning to NBC News chief financial correspondent Anne Thompson to take “a look at how Americans are adjusting to a housing market that’s really on the bubble.”
On ABC’s “World News Tonight” anchor Charles Gibson said “sales of existing homes fell in June, the 8th decline in the past 10 months, and the backlog of unsold homes grew. There are more than 3.7 millions homes sitting on the market right now unsold.”
It’s “a remarkable turnaround for a housing market that seemed to defy gravity for years,” mused Gibson.
“The downturn in the housing market so far appears to be orderly,” the career economist told the House Financial Services Committee on July 20 [2].
What’s more, in framing their stories, ABC and NBC presented a bleaker picture than actually exists. Home sales are cooling off but not as dramatically as real estate experts had anticipated.
As the [3]Reuters reporter Zubin Jelveh reported on July 25, the “seasonally adjusted annual rate of 6.62 million units in June” was a dip from the “6.71 million” houses calculated in May. Even so, “analysts had expected home resales to slow even further to a 6.58 million unit rate.”
In a January 10 news release, the NAR predicted 2006 would see a total of 6.79 million homes, a number “which would be the second highest on record.”
Far from being a turnaround or a bubble burst, the housing market is performing strongly in historical terms according to the NAR.
“There were 7,072,000 existing-home sales in all of 2005, up 4.2 percent from 6,784,000 in 2004,” the [4]National Association of Realtors reported in a January 25 press release. “This is the fifth consecutive annual record; NAR began tracking the sales series in 1968,” the release added.
What’s more, NAR chief economist David Lereah – whom NBC’s Anne Thompson featured in her July 25 story – began 2006 urging the press to take cooling sales with a grain of salt.
“We don’t need to break a record every year for the housing market to be good – in fact, cooling sales are necessary for the long-term health of this vital sector,” Lereah wrote in a January 10 press release.
In a release entitled [5]“Housing Market to ‘Normalize’ in 2006,” Lereah argued that “A modest slowdown in home sales, coupled with improvements in housing inventory, means the market is in the process of normalization. That will help to bring balance between home buyers and sellers, yet sales will remain historically strong.”
[5]http://www.realtor.org/PublicAffairsWeb.nsf/Pages/Jan06Forecast?OpenDocument
The Business & Media Institute has repeatedly [6]written on the media’s [7]obsession with a devastating “housing bubble,” such as ABC’s Elizabeth Vargas warning on the May 19, 2005, “World News Tonight” that “the run up in housing prices” was “beginning to look something like the boom in Internet stocks, and we know what happened there.”
BMI also released a [8]comprehensive report in November 2005 documenting over four years of the media’s persistent preaching about an impending housing bubble burst.