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Should you listen to the media? 

The financial press is worried that they might have gone too far with their housing data, paralyzing the nation into recession.  So they're finally beginning to question the indexes where they get their data.  Indexes can be misleading because of the locations, prices, types of housing, and rates of increase they track.

In late April, Robert Shiller, founder of the Case-Shiller Index, announced that there was a good chance housing prices would fall further than the 30 percent drop during the Great Depression.  Shiller has plenty of reason to be negative; he makes money when people buy housing hedge funds through his company. 

One brave journalist, Chris Plummer of Marketwatch, is writing that Case-Shiller is flawed.  Plummer slammed both Shiller's Index and the Associated Press for their negative reporting.  When Shiller says home prices are going to fall 30 percent, no one asks why with unemployment rate is a little over 5 percent.  What's going to drive home prices that low?  Also, the glaring discrepancy in this case is that 17 of the 20 metro areas posted record annual declines, yet 78 percent of the 330 metropolitan regions tracked by the National Asso. of Realtors reported price increases. 

And S&P Index Committee Chairman David Blitzer acknowledged his organization's overall metro-market readings paint an incomplete picture. The Index covers only 20 markets, heavily weighted to the most volatile metros in the nation.

What this means is not only are the indexes misleading, the reporting is worse.  Right now we have mortgage interest rates three points below historical norms. We have housing inventories five months greater than balanced markets. Combine that with unemployment that is a half percent lower than the recession of 2003, and you have excellent homebuying conditions.  Don't listen to the media.  Go buy a home.