The headline of a Washington Post article told readers: "Economists surprised as new-home sales fall to lowest level in nearly 50 years." The first sentence explained: "sales of newly built homes unexpectedly plummeted in January to their lowest level in nearly five decades, providing more evidence of the housing market's fragility." Actually, economists who understand the housing market were not at all surprised by the data. The Post should try to rely on sources who know about the topics on which they are supposed to be experts. During the years of the run-up of the housing bubble the Post's main source on the housing market was David Lereah, the chief economist of the National Association of Realtors and the author of the book, Why the Real Estate Boom Will Not Bust and How You Can Profit From It.
--Dean Baker
