|When looking at housing data, don't jump to conclusions||When looking at housing data, don't jump to conclusions||Paige Silva||Silva||2019-11-04T06:00:00Z||Housing|
Last week, the U.S. Census Bureau released third quarter 2019 homeownership rates, and one surprising number caught my attention—the rate for San Antonio. From 3Q2018 to 3Q2019, homeownership there dropped 3.2 percentage points from 63.4 to 60.2 percent. Compare this with Texas’ homeownership rate, which increased from 62.7 to 63 percent during the same period.
San Antonio’s homeownership rate typically trends higher than the statewide average because of the metro’s older population. There are many factors that could explain the sudden drop in the homeownership rate, such as change in preference of the population from buying to renting, an influx of younger residents who can't afford to buy, uncertainty regarding future economic conditions that may hinder prospective buyers from making the leap, etc.
However, there is another possibility, one rooted in the data. Because San Antonio’s homeownership rate is relatively volatile, the margin of error this quarter was 5.9 percent with a 90 percent confidence interval. In other words, the Census Bureau estimate is expected to be within 5.9 percentage points of the real value 90 percent of the time. The 3.2 percentage point change from 3Q2018 to 3Q2019 is within the margin of error. This means that there is a chance the homeownership rate may have increased rather than decreased.
When looking at data, keep in mind the limitations before jumping to wild conclusions. That's not to say we should ignore the decrease in San Antonio’s homeownership rate, especially if the metro’s homeownership rate continues to trend downward, or that the possible reasons I mentioned have no truth here. Rather, we should explore all scenarios and explanations before settling on the worst.