“Worse than the Great Depression!”
That seems to be the rallying cry of every media outlet over the past few days. While it makes for sensationalistic headlines, it is not true. At least, we do not have data that proves it is — or isn’t — true.
Let’s start with a few facts about Housing data:
1. There is little reliable data about national home prices in the 1930s. The NAR data only goes back to 1969, and the US Government data from that era covers new home construction, not existing home sales.
2. The closest thing we have to national prices is the S&P/Case Shiller Index. The Index, which uses repeat home sales pricing, originated in the 1980s. Any CS chart showing home prices in the 1920s or 30s does not use actual sales data, but are hypothesized (Historical data for the indices are available back to January 1987). Charts, such as this one, are based on theoretical not actual, sales prices, and as such should be taken with a grain of salt.
3. We do know that sales volume of New Homes has fallen 82% versus 80% covering the 1929-33 era. By that one measure, you can ostensibly draw a conclusion that this single metric, covering less than 15% of all home sales, is worse today.
How does the Great Recession compare to the Great Depression? Some facts we do know:
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