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Avoid fake real estate news? What are we even talking about? Why is it important? Simple – as a professional, part of your job is to cut through the hype and help your clients understand what’s actually happening.
Consider this scenario, recently posed in an online article. What if interest rates increase to 5 percent, wonders Diana Olick of CNBC in an article titled “Here’s how a 5% mortgage rate would roil the US housing market.”
“A 5 percent rate would cause more than a quarter of today’s homebuyers to slow their plans, according to a Redfin survey.”
Well, yes, but it turns out that the statistic she highlights is but one of several and, should it come to pass, it most certainly will not cause the housing market to “roil.”
We call this “cherry picking”—choosing to highlight the statistic that furthers the writer’s agenda.
What would cause disruption in the housing industry is if a large share of the respondents said that a hike in interest rates would cause them to give up on buying a home. But, that isn’t the case.
Let’s dive a little deeper into how to avoid fake real estate news.
“Just 6 percent said they would drop their plans to buy altogether,” according to Olick. And, she continues:
“About one-fifth of consumers said 5 percent rates would cause them to move with more urgency to purchase a home, fearing rates would rise even further. Another fifth said they would consider more affordable areas or just buy a smaller home.”
First, notice how she uses a mix of percentages and fractions.
It takes our brains some time to switch between the two. And, since it’s a well-known fact that Americans suck at math, many will assume that whatever those numbers are, they illustrate what she stated in her title.
Plus, most online readers skim text. In other words, they won’t take the time to figure out the numbers.
Why the mix of fractions and percentages?
Think about it: “About one-fifth” sounds a lot tinier than 20 percent. And both of the largest number of responses are stated as “one-fifth.”
Take away the fractions and here’s what her stats say:
What did the other 29 percent of respondents say? We aren’t told—at least in this CNBC article.
So, we went to the source, and here’s what Redfin’s Greg McCarriston has to say about the company’s survey:
“Prospective buyers were unfazed by the prospect of rising mortgage rates.”
Well, that’s certainly not what we expected. In this case, we avoid fake real estate news by reading the rest of the study.
It turns out that the study actually shows positive news for the real estate industry. And, since humans are basically pack animals, a potential buyer reading this, rather than the CNBC article, will relax if rates go up. After all, if they don’t faze other homebuyers, why should they faze me, right?
We also find that Redfin used actual percentages—not fractions.
And, we found the missing respondents (they’re bolded, below).
So, Olick, for some reason, felt we didn’t need to know about the second highest response rate in this survey: “25 percent say a rate hike will have no impact on their decision to buy a home.”
Taken in total, then, Redfin’s survey finds that if the mortgage rate increases to 5 percent, it will have little effect on the US housing market.
In fact, a whopping 94 percent of homebuyers say that despite a rate hike, they may slow down or change their process, but they will still buy a home.
It might take more to avoid fake real estate news than we thought. It isn’t just not reading things. It’s interpreting information critically.
Your clients might not – this is why it’s so important for you, as a real estate professional, to take the time to critically and skeptically read anything real estate-related.
If something in a news article seems hinky, take a minute to find the source, and verify the statistics, before passing it on to clients, leads and anyone else.
In our opinion, this article constitutes “fake real estate news.”
After all, is there anything in the survey that sounds like a 5 percent mortgage rate will “roil the US housing market?”
Of course not, yet the average homebuyer or seller will read it lightly, coming away with the impression that a mortgage rate hike to 5 percent is on the horizon and that the real estate market, as a result, will be “in a state of turbulence or agitation.”
And, if you don’t think the writer or publisher very carefully chose to use “roil” in the headline, think again.
So, we now know that there is a deliberate attempt to mislead readers. What we don’t know is why.
Headlines are to writers what scripts are to Tom Ferry followers. Sometimes it takes longer to come up with the right headline than it does to write an entire article. They are that important.
In all fairness, the CNBC headline may have been constructed as clickbait, akin to the old “You’ll never believe what happened when …” stuff.
Then again, it may have been written knowing that many people only read headlines. In other words, it contains the message the writer or publisher wants us to walk away with.
Even those who do read the entire article are blinded by the headline, according to The New Yorker’s Maria Konnikova, quoting an Australian study.
“The headline, it turns out, had done more than simply reframe the article. In the case of the factual articles, a misleading headline hurt a reader’s ability to recall the article’s details.”
As an industry professional, you owe it to real estate consumers to tell the truth and the only way you’ll get it is to read everything critically and perform your own due diligence.
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