Bloomberg Follies February 22, 2017Posted by geoff in News.
Not sure why I bothered, but I was just reading a Bloomberg article entitled, “Why Trump’s immigration crackdown could sink home prices.” The author gives several pointless anecdotes about immigrants suddenly not buying homes because they’re afraid of Trump’s immigration policies. And then he gives us this chart:
You can see in the header what he thinks the chart says: foreign-born ownership rates are buoying up the real estate market when domestic ownership declines. But the curves don’t show that at all: it may be true from 2005 – 2007, when domestic ownership slipped and foreign-born ownership kept rising, but in general it’s untrue.
Did he even look at the curves before he wrote the title of the chart?
Then you have to consider that the chart itself is meaningless. Trulia originally made the chart to show that foreign-born ownership rates are catching up with domestic-born ownership rates. The rate is just the percentage of people in that group who own homes, but it says nothing about how big the group is.
Since the number of foreign-born households is much smaller (1/6) than that of domestic-born households, you can see that the rate of foreign-born ownership would have to jump up 6 points for every point lost by domestic-born households. By directly comparing the curves like he did, he’s essentially lying to you.
The last point is that the darker interpretation of foreign-born home ownership is that it prices domestic-born potential owners out of the market. Guess he’s not worried about that.
I shouldn’t read Bloomberg.