Menu
Cart 0

Wall Street Journal continues to try to spin high home appreciation rates as bad news.

Posted by John Reed on

Nicole Friedman, the WSJ's home price appreciation denier has an article titled "Home Prices Suffer a Monthly Decline."
.
Finally, she has the price drop she has been propagandizing for.
.
Only she doesn't. She has mastered Biden arithmetic. When inflation went from 8.2% to 8.3% (12- month moving average), really old Joe said inflation was just .1%.
.
Normally, the home price numbers reported are 12-month moving averages, to get a downer Nicole changes to reporting a one-month "moving average." If you just compare the Case-Shiller index for July to the one for June, it dropped .3%. If you seasonally adjust it, which you should when you start using tiny samples to mislead people, the one-month drop is .2%.
.
That jive is the headline and first two paragraphs of the story. In the third paragraph, Friedman admits the following.
.
What Friedman is writing about is the 12-month moving average Case-Shiller national home price index was 18.1% higher than a year before for the 12 months ended 6/30/22. And in the 12 months ended 7/31/22, it was 15.8%.
.
Investment fans, if the asset you own increased in value 18% or 16% or "just" 10% over the last 12 months, you should be doing cartwheels. Way more so when you remember that the American principal residence, alone among all investment assets, can be financed with a 30-year, fixed-rate, 6.5%, self-amortizing mortgage that has a loan-to-value ratio usually of 80% to 100%.
.
The truth is stocks suck, bonds suck, crypto sucks, gold and silver suck, and home owners are making a double-digit or even triple-digit real returns on equity!
.
Nicole Friedman and her WSJ colleagues incessantly spin this as home sales (units sold) are DOWN, some sellers are taking their home off the market so inventory available to buy is DOWN, affordability is DOWN, and assorted other metrics that somehow manage to make a 15.8% gain sound bad.

Share this post



← Older Post Newer Post →