Recent media reports indicate that house prices are rising. I was curious to see how many times the mainstream news reports on the Case Shiller house price index mentioned the word “inflation.” I also wanted to show just how bad housing inflation is, but lo and behold, in the process of researching the subject, I learned that there is no inflation in housing.
A CNBC.com post on the just released Case Shiller house price index used the word “gains†4 times and “higher†6 times, but did not mention “inflation.â€
Business Insider used “higher†2 times, and “gains†once. “Inflation?†Zero.
The Wall Street Journal’s piece started with “price growth,†using the “growth†euphemism 10 times, including in the headline. “Increase†showed up 6 times. A total of 16 descriptions of the price change mentioned “Inflation†how many times? Zero.
Now, Rupert Murdoch owns both the Wall Street Journal and Realtor.com. We shouldn’t expect anything negative from the hired public relations and marketing arm of the NAR.
Bloomberg was more creative with its euphemisms. Its reporters used words like “advance, growth, prop up, gains, healthy, elevated, increased, and climbed.†The words “inflate†or “inflation?†Never.
So you see, house prices don’t suffer “inflation.†They gain, grow, jump, climb, advance, increase, appreciate, and rise. But they don’t “inflate.â€
Meanwhile, house prices do continue to inflate. Only not at the rate that Case Shiller says. Case Shiller uses a 3 month average of sales the CLOSED in August, September, and October. That means its index represents a smoothed average price change on transactions that actually took place 30-60 days before that, or the end of July on average. It’s as if the Wall Street Journal today only reported the Dow as of its 90 day moving average price from late July. Who would care about that?
