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Apr 25 / Jonathan

Baker vs NPR again

NPR’s he-said she-said stories are bad enough. I don’t actually think that NPR is particularly in the pocket of Big Real Estate, but it’s hard to come up with a better explanation for this kind of consistent laziness. Well, except for consistent laziness, I suppose.

NPR Conspires With Realtors to Fleece First Time Home Buyers

This one is very close to true. Morning Edition had a piece this morning about the increase in the number of first-time home buyers. Its two sources were Lawrence Yun, the chief economist with the National Association of Realtors and a realtor.

NPR did not include any analysts to give the obvious downside to buying right now, specifically that house prices nationwide are falling at the rate of almost 2 percent a month. In some former bubble markets prices are falling at the rate of 3–4 percent a month. The sharpest declines are at the lower end of the market, the homes that first-time buyers are most likely to purchase.

This means that they are enormous potential gains from deferring a home purchase. For example, at the current rate of price decline, someone thinking of buying a home in the bottom third of the market in Los Angeles can save themselves more than $40,000 by putting off their purchase by six months.

This is why experts on asset building encourage people to delay home purchases at the moment, if at all possible. NPR should have spoken to someone for this story who did not earn their living by selling real estate.

—Dean Baker

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