Stress Caution in Home Sales Reporting

When home sales saw their highest spike in four years last week, business reporters had to work to keep their stories on solid ground.

The temptation to cheerlead what appear to be positive trends was met with resistance. Because even the most beneficial trends will punish a few people, and those stories are just as important to tell.

"We have to try to keep in mind that every time there's a winner, there's a loser," says Rex Nutting, Washington bureau chief of MarketWatch.com, who covered the story for his news site. "This is not a zero-sum game a lot of times."

In the case of spiraling housing sales and costs, the "losers" are those priced out of the market, unable to afford a new home, Nutting says. They deserve a follow-up story.

Even on first-day stories, reporters should reach beyond routine sources who'll just end up exalting the trend in question. Quote people pointing out the downsides. Whether it's renters who can't save enough to buy a home, average workers or investors, find a chorus of voices that better balance your story.

Those voices also help real estate reporters keep from slipping into the same pit that engulfed many tech reporters during the 1990s. By including both pros and cons, and refusing to use numbers just to prove their own preconceptions, reporters save themselves from hyping an isolated trend into a housing bubble.

"We should try not to come to too many conclusions ourselves. We should lay it all out there and let people come to their own conclusions," Nutting says. "You can get trapped into overreacting to every number in a way that's not healthy."

Especially in the housing market, where another recent headline about rising mortgage rates -- scaling 6 percent for the first time in eight months -- may very well reverse the trend in the coming months.

That kind of context sobers up any wildly optimistic economic statistics, Nutter says. When he gets a report of any massive increases, he checks numbers for the last six months and year. He looks at year-over-year comparisons. A surprising spurt one week could actually be part of a healthy rise over the last two years.

Housing numbers, in particular, are "amazingly not precise," he adds. They boast an inordinately high margin for error -- 12 percent -- which casts some doubt on the announced 9 percent rise in home sales. "It actually could have been a loss," he says. "It could have gone down."