For 99% of the people who care about the stock market, it is good when the price of stocks goes up. It’s understandable, then, for the media to portray it as good when stock prices go up and bad when stock prices go down.
What’s more, stocks are, in effect, infinitely divisible. If stocks go up, a new entrant can still buy the same stocks as the earlier adopters; he just has to buy a lower quantity of those stocks.
Houses are not like stocks, though. They are not terribly divisible. Buying half a house, if it’s even possible, is qualitatively different — not merely quantitatively — from buying a house.
Also, people who own stocks tend to own them strictly as investments. Their utility is almost solely as a store of value to be sold later. Houses are surely an investment and a store of value, but they are also a place to live—and having a place to live is actually more important than having a store of value.
So it’s odd when the news media treats the housing market like the stock market. When housing prices go up, sure, that provides some financial benefit to homeowners (and more acutely to realtors, mortgage brokers, and land speculators), but it also has the downside of making it harder for people to own homes.
These days, the tables are tilted against would-be homebuyers and in favor of the investors and homeowners. This is causing millennials and Generation Z to postpone family formation, contributing to our societal retreat from marriage and collapse in birthrates.
What our society needs is an increased supply of housing to match the demand. Most of the country isn’t doing that. Austin, Texas, is. And how does that get treated in the news media? A Wall Street Journal story, “Once America’s Hottest Housing Market, Austin Is Running in Reverse,” offers an example.
“Home prices have fallen more than anywhere in the U.S.,” the article begins. “The Sunbelt city that came to symbolize the pandemic housing boom is now leading a national property cool-down.”
It continues, “Home prices and apartment rents in Austin, Texas, have fallen more than anywhere else in the country, after a period of overbuilding and a slowdown in job and population growth.”
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Perhaps I’m being oversensitive, but this seems to present falling home prices and rising home supplies as a bad thing. The Wall Street Journal uses opinionated terms such as “overbuilding,” to describe a quantity of homes that still results in prices 20% higher than before the pandemic. How is that overbuilt? I would think that’s still underbuilt.
America desperately needs more houses, and we desperately need houses to be more affordable. If the media is going to take a side, it should be the side of that growing number of people who want a home.