Is that a Fact?
By Bryan Caplan
Reading William Greider is one of my guilty pleasures. Credit where credit is due: The guy can write. And the content is interesting, blending fun facts about the economy with bizarre interpretations thereof.
Sometimes, however, I wonder whether his “facts” are even true. This one from Who Will Tell the People? (1992) caught my eye:
[The S&L’s] provided a discreet subsidy for home buyers, regardless of their economic status, and, for forty years, the system worked: Home ownership steadily increased among American families. It was stopped in 1980 with the deregulation of interest rates – and home ownership has decreased among Americans every year since.
Never mind why you would want to subsidize home ownership in the first place. Never mind that it is already heavily subsidized by the tax code. Never mind all of the other factors going on in the U.S. economy during the 1980’s. My question: Is it even true that homeownership decreased every year from 1980 to 1991 (the year before publication)?
Not according to the Census’ statistics on home ownership. Here are the annual national numbers:
Year Homeownership Rates 1980 65.6% 1981 65.4% 1982 64.8% 1983 64.6% 1984 64.5% 1985 63.9% 1986 63.8% 1987 64.0% 1988 63.8% 1989 63.9% 1990 63.9% 1991 64.1%
As you can see, rates rose in 1987 and again in 1991. And the change he laments sums to about 1.5 percentage points. I suspect most people who looked at the raw data would have summarized home ownership rates as “stable.”
Well, maybe he did fact-checking in 1987, then moved on to other projects. It’s a lot more interesting to see if the trend he blamed on deregulation continued. Economists call that an “out-of-sample” test. So what happened?
Answer: As of 2004, home ownership rates stood at 69.0% – an all-time high.