At CJR Daily Steve Lovelady takes apart yesterday’s New York Times article on trends in housing prices. Lovelady begins:
Thursday, the New York Times, with a page one national story inexplicably datelined “Portland, Me.,” told us that “families in a vast majority of the country can still buy a house for a smaller share of their income than they could have a generation ago.”
Really? Hmmm. Let’s read on. It seems that, measured nationally, a family earning the median income would have to spend only 22 percent of its pre-tax income to make the mortgage payments on a median-priced house — “well below” the 30 percent that it took 25 years ago.
Wow! Is that good news, or not? Well, actually … NOT.
Let us count the ways that this story is flawed.
First, once we delve deeper into the story, we learn that this trend peaked in the glory days of 1998, when families only had to shell out 17 percent of their pre-tax income to buy that median home. In other words, in the past seven years, housing costs nationally as a percentage of income have risen 30 percent.
Oops.
Secondly, a study of the accompanying map and graph, conveniently tucked away on the page C9 jump of the story, reveals this nugget: In New York, Washington, D.C., San Francisco, Los Angeles and Miami, the cost of housing as a percent of income has actually risen over the past 20 years. In fact, that’s pretty much true for vast areas of the country — all of Washington State, Oregon, California, Nevada, most of the northeastern United States, and nearly all of Florida. In short, any area where population is growing and not stagnant.