A Debit to just about everybody for constructing a piece of housing news that doesn’t stand up.

We learned from countless outlets that sales of new, single-family homes were up 3.3 percent in April, in comparison to the previous month.

Reuters told us. MarketWatch told us. Agence France Presse told us. Bloomberg told us. The AP told us. And so, with less fanfare, did The Wall Street Journal, The New York Times, and The Financial Times.

Such a prestigious journalistic consensus must be true, right?

Um, no.

In fact, the only true consensus is the willingness to publish a meaningless monthly housing statistic just because the government puts it out.

It’s all here in black-and-white: a joint report by the U.S. Census Bureau and the Department of Housing and Urban Development.

The report does list a 3.3 percent increase, but a couple of pixels away from it we get a more significant number: the margin of error—11.7 percent.

That’s right.

A margin of error larger than the statistic itself—in this case more than three times as large—renders that statistic meaningless.

So all we know with relative certainty is that the change falls somewhere between -8.4 and +15 percent. So maybe sales did increase 3.3 percent. Or maybe they decreased 3.3 percent. Or 7 percent. Or… well, you get the picture.

And, appropriately, the report warns:

[T]he change is not statistically significant; that is, it is uncertain whether there was an increase or a decrease.

We’re as eager for information on the state of the housing market as anybody. But we would rather have no information than false information. And while some organizations did downplay the importance of the statistic, they didn’t go far enough.

We weren’t the only ones to notice the problems with the housing numbers. Barry Ritholtz, who makes a habit of analyzing this sort of thing, noted the problem on his website.

He also lists yet more weaknesses in the statistics, like the fact that the April increase, such as it is, is only due to a downward revision of the previous month’s figure.

The press did generally observe this peculiarity, so we don’t criticize reporters for an omission here. But it does point to a broader issue: The practice of comparing revised to unrevised figures. This doesn’t make sense.

As Ritholtz notes:

The overall trend for the past year has been mostly downward revisions. An apples-to-apples comparison would be an original release to original release (that [for the latest figures] showed flat data, not an increase in new homes sales).

Comparing the original (but soon to be revised) April data to the revised March data presents a misleading picture.

Given the downward trend, anyone want to take bets on which way April will go?

With the mortgage crisis, the housing beat has gone from backwater to front and center. Reporters need to keep up.

Harper’s strong again on the economy

A Credit to Harper’s for raising questions about the reliability of gross domestic product as an indicator of the health of the economy, by publishing excerpts (subscription required) from Senate testimony on the matter.

Jonathan Rowe, a journalist and community organizer, argues that GDP doesn’t give us enough information about the economy, and he sets his sights on the concept of growth.

Growth is good, right? Not necessarily, argues Rowe. He criticizes both the government and the media for thoughtlessly touting GDP growth, rather than examining what exactly is fueling that growth.

To be reflexively against growth is as numb-minded as to be reflexively for it. Those are theological positions. I am arguing for an empirical one. Find out what is growing and the effects. Tell us what this growth is in concrete terms. Then we can begin to say whether it has been good.

Take this example of the GDP obfuscation:

The GDP makes no distinction between a $500 dinner in Manhattan and the hundreds of more humble meals that could be provided for the same amount…. As included in the national accounts, an accretion of luxury buying at the top covers up a lack of necessary buying at the bottom. As the income scale becomes more skewed, the coverup becomes even greater. In this respect the GDP serves as a statistical laundry operation that hides the suffering at the bottom.

This piece builds nicely on a couple of others we’ve noticed recently about how key economic numbers have diverged from reality.

So why should we listen to Rowe and not the economists? Dean Baker over at The American Prospect has a good answer in his discussion of why the media and economist mostly missed the housing bubble.

NYT reports on housing heartbreak

A Credit to The New York Times business section for some sobering reality on how the housing bust actually affects real people.

The Times writes about contractors who clean up and maintain houses that are in foreclosure. It’s an appropriately painful article that sidesteps the landmines about so-called trash-outs that other publications have hit full on—namely that as many as half the ticked-off homeowners vandalize their homes on the way out. That’s spin that suits the mortgage industry just fine.

Mortgage companies hire contractors like these men to inspect and maintain houses that once-proud owners can no longer afford and no one else wants. These days, business is brisk.

These contractors and thousands like them see first hand the detritus of the subprime era: peeling paint, gutted interiors, family dogs left behind to starve, overgrown lawns infested with snakes.

The part we winced at comes further down:

In most cases, the contractors do not interact with the homeowners, but sometimes the contractors are present during evictions that are conducted by county sheriffs. Mr. McCallister recalled the eviction of a 60-year-old man who had misread his eviction notice and thought he had one more week to leave.